NEW DELHI, Feb 26: The economic slowdown during the previous UPA Government had led to rise in Non-Performing Assets (NPAs), Government said today, adding this situation is being corrected through a number of steps, including Strategic Debt Restructuring (SDR) under which 40 promoters of various companies have been replaced so far.
“During the last government’s tenure, economy had slowed down which resulted stress assets going up. But our government has improved the situation substantially,” Minister of State for Finance Jayant Sinha told the Lok Sabha.
In order to check the growth of NPAs and reduce the bad debt burden, RBI has undertaken steps which include formation of Joint Lenders Forum (JLF) for revitalising stressed assets in the system, flexible structuring for long term project loans to infrastructure and core industries and SDR scheme, he said.
The concept of SDR has been introduced by the RBI to help banks recover their loans by taking control of the distressed companies and effecting change in management after they are convinced about the viability of the company on change of ownership, Sinha said.
The scheme aims at reviving the stressed companies and provide lenders with a way to initiate change of management in companies which fail to achieve the milestones prescribed in the critical conditions of the restructuring loan agreement.
The scheme is the subsequent stage to restructuring exercise undertaken by lenders, he said, adding that under the SDR, so far 40 promoters of various companies have been replaced.
The process of preparing a database of big lenders is also on so that JLF could fix their problems, he said.
Sinha said the government is taking steps to improve the economic situation sectorwise like steel, sugar, textiles, coal, spectrum etc.
The various actions the government has initiated include resolving the problems by banks case by case, action against erring CMDs of banks.
CBI probe is also going on against several CMDs of banks, he said. (PTI)
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