Reserve Bank Governor Raghuram Rajan on Saturday made a strong case for cleaning up bad debts of banks and restructure other possible NPAs within a year to put the economy back on track.
He also favoured channelising "full savings" of the households into the financial system so that requisite resources for growth are made available. "In the short term (up to 12 months) there is need to clean up the NPAs and then restructure other stressed loans so as to put the economy back on the track," Rajan said at Gyan Sangam.
Total Gross Non Performing Assets of public sector banks stood at over Rs2.43 lakh crore as on end-September 2014. The top 30 NPAs account for Rs87,368 crore or 35.9 per cent of total gross NPAs of PSBs. Rajan said the bona fide mistakes made by the bankers while taking commercial decisions should be protected by the Government.