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Massive Crackdown by Modi government on NPAs!!! Know how Modi government helped to bring back Rs 4 lakh crore back into system from defaulters!!

When Modi government came into power they took so many steps to revive the economy of country and improve the status of banking system in India. The rut of the system created by previous UPA government in producing so many NPAs was cleared by Modi government step by step.

On 1 Dec 2016, Bankruptcy and Insolvency Law have been passed by the Government and Insolvency Committee started work on the list given by RBI in phase wise manner. In Phase 1, NPA of 9 lakh crore was received by Insolvency Board and today in yet another achievement Corporate Ministry Informed Rs 4 lakh crore came back into the system from defaulters.

It is half of the staggering Rs.  9 lakh crore worth of non-performing assets (NPAs), or bad loans, accumulated by banks which had returned due to the system set in place by the code and continuous effort of Modi government.

The figure was revealed by Corporate Affairs Secretary Injeti Srinivas at the conference on Resolving Insolvency organised by industry chamber CII a day after the release of the report by Insolvency Law Committee (ILC) headed by him.

Noting that the Reserve Bank of India (RBI) had referred 12 accounts, totalling about 25 per cent of the gross NPAs, for resolution under the IBC in June last year, Srinivas said a “good outcome” on half of these cases would help boost confidence in the system, a key component of which is the National Company Law Tribunal (NCLT) — the final adjudicator.

Having good outcomes is a positive indicator It enhances confidence in the system, both domestically and among foreign investors. Once these 12 get settled, the speed will go up further and help in more recovery. The second batch of 21 cases sent by the RBI to the Insolvency and Bankruptcy Board of India (IBBI) in January were taking time to come through the resolution process.

The government has embarked on a two-pronged strategy on bad loans. On the one hand, it has brought in the IBC which provides for a six-month time-bound insolvency resolution process, extendable by another 90 days. On the other hand, it has approved an Rs. 2.11 lakh crore recapitalisation plan for state-run banks.

These both approaches of insolvency resolution process and recapitalisation plan for state-run banks has helped the bank to a large extent to get out of the bad condition in which they were thrown by the UPA government.

The object of the exercise was not just loan recovery but to develop a robust market for stressed assets in India, Srinivas said some of these were drawing good bidder interest for revival, particularly in the steel sector, where the favourable short-term outlook has helped “jack up” steel asset prices.

He also said that towards bolstering infrastructure 1,800 insolvency resolution professionals are in place in a period of less than two years. Besides, the government is also considering the creation of additional NCLT benches for speedier disposal of cases.

Providing statistics, IBBI Chairman M.S. Sahoo said that a total of 650 corporate cases were admitted for resolution, of which 500 are ongoing.

Of the rest, 90 have already exited via the resolution or liquidation routes and around 60 have been closed after review, he said.

The magnitude of the amount recovered is same as de-registration of 3 lakh Hawala Companies under Company Act. Modi government is continually taking so many steps for improving the banking sector and achieving the vision of New India.

If some people like Mallya ran away or Nirav ran away it doesn’t mean work is not going on. 4 lakh crore is the biggest comeback ever from corporates. Congress can only shout and lie from their teeth after doing rampage of distributing Crony loans but It’s Modi government who is bringing back.


Niharika

Source
Economic Times
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