Finance Ministry to check readiness of PSBs over bad loan frauds

Finance Ministry to review preparedness of PSBs over bad loan frauds – Qbera Digital Loans

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State-run lenders will soon be under the Finance Ministry’s supervision regarding their measures taken to prevent bad loan frauds. The banks were directed to tackle bad loans by coordinating large ticket loans and by improving various aspects pertaining to stressed assets. Each bank was asked to submit a proposal including all the details, and get an approval from their respective boards.

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According to EASE (Enhanced Access and Service Excellence) – a reforms agenda by the government, PSBs were directed to bring down the stressed assets’ exposure to corporates to 25% from the current number. A senior official of Finance Ministry further added that, of the Rs. 2.1 lakh crore bank recapitalization plan, they have already disbursed Rs. 88,000 crore.

In March 2015, stressed assets of state-run banks were at Rs. 2.67 lakh crore, however, they tragically increased to Rs. 7.77 lakh crore at the end of March 2017. After the Punjab National Bank fraud case surfaced, in order to address risks, the government granted 15 days to PSBs to make a “pre-emptive” action plan. With an agenda to curb similar fraud cases, PSBs were issued a set of orders to recheck bad loans amounting to more than Rs. 50 crore.

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