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Home Best Practices India Committee to monitor banks' bad loan recovery

Committee to monitor banks' bad loan recovery

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A two-member committee has been created by Finance Ministry to follow-up all cases of loss assets with each public sector bank (PSB). The committee has also been asked to follow-up all cases filed with debt recovery tribunals (DRTs). 

The committee members that have been appointed by the Ministry are, Mr P.L. Gairola, former Chairman & Managing Director, Dena Bank, and Mr Anil Girorta, former Executive Director, Andhra Bank. 

The committee will have a meeting with the executive director and general manager of each bank once a month wherein the status of each case will be reviewed.

The committee has been formed with the objective to bring focus on liquid assets locked up in the form of loss assets and in cases filed with DRTs. This could also be seen as a move to make up for a possible decline in income from loans and advances due to slowdown in the economy. Bankers say recoveries directly get added to the bottomline and could help banks sustain profitability at last year’s level.

It will prescribe the milestones to be achieved before the next meeting.

Initially, the committee will take up monitoring of loss assets and DRT cases of banks located in the National Capital Region (NCR) – Punjab National Bank, Oriental Bank of Commerce and Punjab & Sind Bank.

Members of the committee will visit the headquarters of various PSBs once in a quarter and in between they would review through video conference each month from the zonal office of the bank located in NCR. Come August, the committee members will be required to make the first visit to all banks and to put the monitoring system for recoveries in place.

 

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