The government has recovered non-performing assets (NPAs) worth Rs 4 lakh crore over the past four years, Finance Minister Nirmala Sitharaman said on Friday.
In the past one year, NPAs worth Rs 1 lakh crore has been recovered, she said while presenting the first full-fledged Union Budget of Narendra Modi 2.0 government in Parliament.
Government-owned and private banks besides non-banking financial companies have been saddled with huge NPAs, leading to severe liquidity crunch in the market.
In a reaction to a question asked in Lok Sabha last week on the NPA, Finance Minister Nirmala Sitharama had replied saying "Provisional data showed that Gross Non Performing Assets (GNPAs) or bad loans of the public sector banks (PSBs) declined by Rs 89,189 crore to Rs 8.06 lakh crore as on March 31, 2019".
NPAs declined as a result of the government's 4Rs strategy of recognition, resolution, recapitalisation and reforms, Sitharaman said.
As per RBI provisional data on global operations, gross NPAs of Scheduled Commercial Banks (SCBs) stood at Rs 9.49 lakh crore during FY19.
The Reserve Bank of India (RBI) had initiated an asset quality review (AQR) in 2015 to clean up balance sheets of the bank. As a result of AQR and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were provided for.
"As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be aggressive lending practices, wilful default, corruption in some cases, and economic slowdown," said Nirmala Sitharaman.
Steps taken to expedite and enable resolution of NPAs of PSBs, include, the Insolvency and Bankruptcy Code (IBC), Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act and stressed asset management verticals, she added.