PSB Leaders Directed To Monitor Key Insolvency Cases
The Finance Ministry of India recently convened a crucial meeting with public sector bank (PSB) leaders to tackle the management of non-performing assets effectively. During the session held on 22 December, Financial Services Secretary Vivek Joshi stressed the significance of closely monitoring and assessing the top 20 cases under the Insolvency and Bankruptcy Code (IBC).
Joshi specifically directed PSBs to conduct monthly reviews of these high-priority IBC cases to expedite their resolution. Additionally, he emphasised the need to closely monitor cases that have been pending admission and resolution under the IBC for an extended period.
The meeting highlighted the essential role of collaboration in achieving swift and efficient resolutions. Banks underscored the necessity for seamless coordination among their legal teams, the National E-Governance Services Limited (NeSL), and the Insolvency and Bankruptcy Board of India (IBBI). This collaboration aims to streamline processes and ensure timely resolutions of these cases.
Furthermore, an earlier workshop chaired by Joshi focused on improving customer service in banks. Various initiatives were showcased by banks to enhance customer experiences, including continuous monitoring of feedback channels and the improvement of contact center services. The importance of adopting a customer-centric approach throughout the organisation, leveraging technology to augment customer service, and setting high service delivery standards were emphasised during the session.
In a separate meeting, Joshi led discussions regarding the functioning of the National Asset Reconstruction Company Limited (NARCL), established in 2021 to tackle bad loans in the banking system. The challenges faced by NARCL and participating banks were highlighted, with discussions focusing on establishing efficient systems and processes for assigning potential debts to NARCL. Additionally, strategies were discussed to minimise the time taken for the acquisition process and to address issues related to creditors arising from diverse security structures.
NARCL, backed by a government guarantee of Rs 30,600 crore for security receipts, follows an arrangement where it pays up to 15 per cent of the agreed value for bad loans in cash, with the remaining 85 per cent covered by government-guaranteed security receipts.
The Finance Ministry's proactive stance in overseeing the management of bad assets, reviewing IBC cases, fostering collaborative efforts for swift resolutions, enhancing customer service initiatives, and monitoring NARCL's operations underscores the government's commitment to addressing banking sector challenges and ensuring financial stability.
