New Delhi, June 9 (KNN) For faster resolution of bad loans, a Committee has been set up, which would come out with its recommendations on setting up an asset reconstruction or asset management company.

Union Finance Minster Piyush Goyal has said this after a meeting with public sector banks from western and southern region at State Bank of India's headquarters on June 8, 2018.

Goyal told the media that the committee has been formed, which over the next two weeks will come out with their recommendations to set up an asset reconstruction company (ARC) and/or an asset management company (AMC) for faster resolution of stressed assets.

The committee will be headed by Punjab National Bank's non-executive Chairman Sunil Mehta, he added.

He said that the committee will consider whether such an arrangement will be good for the banking system and, if any such suggestion is advisable, it will also consider the modalities by which such an ARC and/or and AMC should be set up.

For this, he added “We will have to wait till the committee has discussed with all the bankers and come up with their recommendations, whether we should look at this as an option, and what should be the structure or modalities of this proposal.

Apart from this, the finance ministry officials and the state-run banks during the meeting discussed a host of issues related to the banking sector, including improving the credit flow, while mitigating the risks associated with that, to further strengthen the growing economy and methods to achieve global standards for the country's banks.

A proposal on having an oversight committee, comprising of retired judges, vigilance officers, regulators and external experts, to help faster decision making in the banking system was also discussed.

To resolve the issues related to credit flows to MSME sector, exporters and other small and medium borrowers, banks decided to come together and take faster decision, Goyal added.

Further, Lenders discussed on a process to ensure credit flow to good borrowers or good accounts where some of the banks that are under Prompt Corrective Action framework of RBI are also the part of consortium, do not face any difficulty in meeting their working capital needs.

Many suggestions to strengthen the governance process and to improve the performance of PSBs were discussed during the meeting.

The government will support to strengthen the operations of PSBs and to protect the interest of depositors, customers and all the stakeholders, including the employees of these banks, he added.

The minister said efforts are being made to fill all the vacant position at PSBs in the next 30 days.