The Finance Ministry has asked public sector banks to approach the newly constituted overseeing committee (OC) for resolution of all high-value bad loans and not just accounts considered under S4A.
This was conveyed to the lenders at last month’s meeting between Finance Minister Arun Jaitley and the heads of PSU banks.
According to ministry sources, some banks were under the impression that only cases under the Scheme for Sustainable Structuring of Stressed Assets (S4A) are to be reviewed by the OC.
There were some information gaps which have been addressed in the meeting with the Finance Minister, sources said.
A two-member OC, which includes former State Bank of India chairman Janki Ballabh and former chief vigilance commissioner Pradeep Kumar, has been set up by the Indian Banks’ Association in consultation with both RBI and vigilance and investigating agencies.
The OC has been created to ensure that the entire exercise of NPA resolution is carried out in a transparent and prudent manner.
Gross NPA of public sector banks has surged from 5.43 per cent (`2.67 lakh crore) in 2014-15 to 9.32 per cent (`4.76 lakh crore) in 2015-16.
Meanwhile, the RBI has said it will come out with modified guidelines by this month-end to allow a portion of sustainable bad loans to be treated as standard asset in a bid to effectively deal with high NPA problem.
The Reserve Bank has put in place the ‘Scheme for Sustainable Structuring of Stressed Assets’ (S4A) in order to provide an avenue for reworking the financial structure of entities facing genuine difficulties and requiring coordinated financial restructuring.
The scheme provides flexibility in restructuring, which may involve material write-down of debt and/or making large provisions, RBI had said in the fourth bi-monthly monetary policy review for 2016-17.
Banks that have taken up cases for resolution under the S4A had represented that the asset classification norms under the S4A may be reviewed to make the scheme more effective.
Accordingly, it is proposed to allow that portion of debt determined to be sustainable to be treated as a standard asset in all cases, subject to certain conditions, it had said.
Detailed guidelines in this regard will be issued by end-October 2016, it had said.
There will be no job losses, FinMin assures CBEC officers
New Delhi: Trying to dispel worries, the finance ministry has assured CBEC officers that there will be no reduction of manpower under the new GST regime and the HR policy will be drafted after taking their views on board.
In a meeting with the ministry last week, central excise officers flagged their concerns about use of technology and transfer of any assessee of excise and service tax to states under the new framework, leading to surplus manpower.
“We flagged our concerns regarding surplus manpower and HR policy in the new regime. The board has assured us that there will be no manpower reduction. Also they have asked us to send our comments on human resource, which will be looked into for framing of the policy,” Ravi Malik, Secretary General, All India Association of Central Excise Gazetted Executive Officers, told the news agency.
The association had earlier planned to hold dharnas on October 14, but following the assurance from the board, it has decided to shelve the plan.
“We have demanded that the 11 lakh service tax assessees which are under the Centre should continue to remain with the Centre in the GST regime. The board has said the final decision will be taken in the next meeting of GST Council and we will decide on our future course of action after that,” Malik said.
The Government plans to roll out the goods and services tax (GST) from April 1, 2017. GST will subsume excise, service taxes and other local levies.
The first meeting of the GST Council on September 22-23 had decided that the Centre would continue to assess 11 lakh service tax filers in the new dispensation, to begin with.