Special teams to recover high-value bad loans of PSBs

The government wants public sector banks to remain alert about non-performing assets

- Subhash Narayan

Public sector banks (PSBs) are drawing up a plan to lay a threshold of ₹100 crore and above and set up specialized teams to recover bad loans, two persons aware of the matter said.

The plan being pushed by the finance ministry also involves possibly writing down or liquidating cases where the default amount is low but recovery is difficult, and where the transaction cost of pursuing the case and making a recovery is more than the value of a bad loan, the first person quoted above said.

These banks have also been asked to restructure their legal teams if they have failed to secure resolutions from courts and tribunals for cases being pursued under the Insolvency and Bankruptcy Code (IBC) at the National Company Law Tribunal (NCLT).

In addition, each bank has again been asked to identify afresh their top 10 stressed assets and begin the process of resolution of these accounts directly under the supervision of a high-level bank official in the rank of managing director and chief executive officer, the second person quoted above said.