With Rs 6 lakh cr NPAs, PSBs may be asked to auction stressed assets

Currently, PSBs are saddled with NPAs or bad loans to the tune of a staggering Rs 6 lakh crore

State-owned banks reeling under the burden of stressed assets may be asked to put defaulter companies' assets on the block.

On Wednesday, the Cabinet approved an ordinance to empower the central bank by amending the Banking Regulation law to give it more teeth and set up oversight committees to intervene on behalf of banks while deciding on non-performing assets (NPAs).

There will also be fresh guidelines for the public auction of assets by public sector banks.

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"The large, cash-rich public sector undertaking will be encouraged to buy the auctioned assets in their sector by the state-owned banks," said an official.

The amendment of section 35A of the Banking Regulation Act, 1949, will give the Reserve Bank of India (RBI) the right to issue directives in the interest of banks.

President Pranab Mukherjee is expected to give his assent to the ordinance shortly.

The stressed banks may also be encouraged to take a haircut in case of genuine business failure.

Currently, public sector banks (PSBs) are saddled with NPAs or bad loans to the tune of a staggering Rs 6 lakh crore.

Finance Minister Arun Jaitley on Wednesday said that the Cabinet has taken some important decisions with respect to the banking sector which have been referred to the President for assent. Read more

Narendra Modi cabinet likely to see 19 new ministers: Who are they?

Narendra Modi cabinet likely to see 19 new ministers: Who are they?

At least 19 new ministers are to be sworn in today, which government sources have said will strengthen the Prime Minister Narendra Modi-led team with “experience, expertise and energy”.

Sources said the PM laid down the selection procedure “to bring in doers and performers who would deliver on his vision of development and good governance, and further his central priority of gaon (villages), garib (poor) and kisan (farmers). “New ministers were identified from various walks of life to bring to bear their unique rich experience and expertise to their office,” sources said.

The list has several who are OBCs, five Dalits, two from minority communities and two women. The 19 have been drawn from 10 states. However, several of the new ministers are in their 60s and have been brought in primarily to ensure the delivery of promises the government has made in its three budgets and the BJP manifesto.

Let's take a look at the new ministers in Modi cabinet: