Finance minister P. Chidambaram with minister of state Namo Narain Meena (right) and financial services secretary Rajiv Takru in New Delhi on Tuesday. Picture by Ramakant Kushwaha
New Delhi, Oct. 22: The government is keeping a watch on as many as 30 top defaulters of each public sector bank and has asked banks to set up an exclusive department to recover the money, finance minister P. Chidambaram told reporters after a meeting with PSU bank chiefs.
Chidambaram said it was the big borrowers with loans of more than a crore who were not paying up and added that defaulters often hindered the recovery process.
“We are monitoring the top 30 NPA (non-performing assets) accounts in each bank, each zone. It is a matter of concern that it is the big borrowers (with loans of over Rs 1 crore) who are defaulting,” Chidambaram told reporters.
“Banks have been advised to empower or designate a senior officer, at least of general manager rank, to look at recovery, especially recovery from written-off accounts. We will try to recover as much as possible from the written-off accounts.”
The minister expressed satisfaction over the credit growth of public sector banks and assured them that the government would finalise the modalities for a capital infusion of Rs 14,000 crore within a week.
As of June, the gross NPA of nationalised banks stood at 3.89 per cent of assets and that of the State Bank group at 5.50 per cent.
Chidambaram said the situation was not as bad as it was in 2000, when gross NPAs had touched a high of 14 per cent.
Gross NPAs made up 3.4 per cent of total lending in 2012-13 but are expected to rise to 4.4 per cent in the year to March.
Stating that there were some wilful defaulters, Chidambaram said, “The bulk of the people do not wilfully default. They default because of circumstances. Once the economy and cash flow pick up, they will pay.”
“We have told them (PSU banks) to keep a close watch on these largest accounts and have to recover the amount. Recoveries are taking place, but not as much as I would like. I hope it will improve.”
The finance minister today ruled out the possibility of lifting a ban on the import of gold coins and medallions and asked banks to strictly follow the guidelines.
“Import of gold coins and medallions is prohibited. Nobody can import gold coins and medallions,” he said, referring to a suggestion that the Centre should allow the shipment of coins to be given as gifts during the festive season.