New Delhi, July 3 (KNN) Suggesting a plan for dealing with bad loans up to Rs 50 crore, the Sunil Mehta-Panel has said that under the SME Resolution Approach (SRA), loans up to Rs 50 crore would be dealt using a template approach supported by a steering committee.

The panel has recommended that the resolution should be non-discretionary and completed in a time bound manner within 90 days.

Accepting Punjab National Bank Chairman Sunil Mehta-led panel's report on tackling stressed assets, the Union Finance Minister Piyush Goyal has decided to set up independent asset management companies (AMCs) and alternate investment funds for speedy resolution of stressed assets in the banking system.

The panel report prepared by the PNB committee titled “SASHAKT” has suggested 5 pronged approaches on resolution of stressed assets.

Commenting over this report and his latest decision to deal with stressed assets, Goyal said that the whole mechanism to be adopted by banks will be based on transparent market based solution without any involvement of government. The focus will be on asset turnaround.

Though the committee has not suggested creation of bad bank, he added.

For the loans above Rs 500 crore, the committee has suggested a structure which will be a combination of asset reconstruction company (ARC), alternative investment fund (AIF) and asset management company (AMC).

For the loans between Rs 50 crore and Rs 500 crore, the committee has suggested a bank-led resolution approach within 180 days. Under this, the banks will get into an inter-creditor agreement that authorize the lead bank to implement a resolution plan.