New Delhi, Mar 15 (KNN) Union Finance Minister Arun Jaitley today said the Steel Sector is on its path of recovery while many decisions have been taken in the Infrastructure, power and textile Sectors to resolve their problems.

He was making his Opening Remarks here today at the First Meeting of the Consultative Committee attached to the Ministry of Finance. The subject of today’s meeting was “Non Performing Assets (NPAs)”. 

During the meeting the members suggested that a Special Bank may be created where NPAs of all the Public Sector Banks be transferred. It was also suggested that when the minimum import price on import of specific steel products have been introduced, then the similar exercise should also be undertaken for the raw material being used to produce the finished products so that smaller units are also benefitted.

Young entrepreneurs who have taken soft loans from the banks but suffered due to slow down may be supported by the banks in order to revive their businesses. 

Jaitley said that to deal with NPAs of the banks is a challenging task even though the NPAs have shown declining trend in the last quarter of the current financial year.

He said that the core problem of NPAs is with very large corporates, though few in numbers, predominantly in the steel, power, infrastructure and textile sectors.

He said that they had expanded their capacity during the boom period (2003-08) but could not face the onslaught of global financial crisis and consequent slow down thereafter.

He said that the Government is taking sectoral specific measures to deal with the problem of NPAs specifically in the resolution of large debts.

The Finance Minister further said that RBI has also made an Oversight Committee to look into process of the cases referred to it by the different banks.

The Union Minister of Finance further said that the Insolvency and Bankruptcy Board of India (IBBI) has already been set -up under the Insolvency and Bankruptcy Code, 2016. 

In the Steel Sector, Minimum Import Price (MIP) has been introduced on import of specific steel products in December 2016 and 10 coal mines have been auctioned to the steel sector.

Amended Technology Up-gradation Fund Scheme has been approved by the Government in the Textile Sector. In the Power Sector, measures taken include introduction of Ujjwal DISCOM Assurance Yojana (UDAY), auction of natural gas for stranded gas power projects, and allocation of more than 100 coal mines to private and government companies through reverse e-auction.

During the presentation, the members were informed about the various legal mechanisms made available for recovery including the Recovery of Debts due to Banks and Financial Institutions (RDDB&FI) Act, Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 and the Insolvency and Bankruptcy Code 2016 among others.

It was also suggested by some members that there is need to restore the confidence of the officers of the banks which have been off later adversely affected due to increasing NPAs.

Measures be taken to comfort these officials and to enable them to take commercially viable and rational decisions. They suggested creating a Special Performance Vehicle (SPV) Committee outside the banking system to guide commercial decisions.