A multi-faceted plan is being worked out by both the Government and the Reserve Bank of India, to put down the wilful defaulters. Also, an one time settlement strategy is being worked out for some sectors of the economy. Major NPA was found in the areas of Steel, Power, Infrastructure and Textile Industries. The various plans involved are:
- Banks will be encouraged to take a haircut
- Set up more panels and revamp the Joint Lenders ‘Forum (JLF) in order to resolve the issues faster.
- Criminal action being worked out against defaulters.
- A onetime settlement scheme is being formulated through a panel headed by Cabinet Secretary P.K.Sinha, with a reduction in the interest rates for few sectors.
- Also there are plans to set up more oversight committees, to look in to the NPAs issues, which are now overseen only by an RBI committee.
- The JLF would permit two to three banks who have the higher exposure in the JLF to approve a restructuring package. At present, if 75% of creditors by value and 60% by number approve, the others are compelled to follow through.
- The proposal adds that a JLF will be formed when the total exposure exceeds Rs. 100 crore and amount turns bad.
- It is also learnt that no more consolidation of weaker banks with larger banks is under consideration, and more support for weaker banks is being worked out for their revival.