Skip to main content

FinMin asks PSU banks to be in hot pursuit of bad loans

By
FinMin asks PSU banks to be in hot pursuit of bad loans
The finance ministry has directed state-run banks to set up a separate stressed asset management and recovery team that will be responsible for stringent recovery follow-up. While most top public sector banks already have set up teams to manage bad loans, market watchers believe that the finance ministry's directive will push midsized and small PSU banks to take bad loan recovery seriously.
"Most state-run banks already have stressed asset management teams who only focus on recovery from such assets but, yes, we agree that a focused approach is required and the government push should help in bringing in that discipline among lenders," a PSU bank official said on condition of anonymity.
Experts also said a separate vertical for managing bad loans would accelerate resolution of the bad loans mess and help recovery, which could lead to write back of provisions in the next two years, boosting profits."These are directionally positive reforms that not only focus on propping up banks but also on speeding up recovery from bad loans," said Siddharth Purohit, research analyst with SMC Institutional Equities. "This move will also allow banks to reach a position where they will be able to raise further capital of their own in the future," he said.
Many Indian banks are burdened with bad loans, which added up to about Rs 8.4 lakh crore at the end of September 2017. State-run banks dominate this segment and had to set aside large amounts of money to face any losses. In 2016-17, state-run banks together lost Rs 18,066 crore.
Bad loan recovery for banks has been rather dismal so far. Banking sector data shows that the country's top six state-run lenders could recover only Rs 7,446 crore from bad loans in the three months to end of September 2017, down from Rs 9,532 crore in the preceding quarter. The drop was more from September 2016 quarter when recovery stood at Rs 12,020 crore.
The Economic Times, New Delhi, 25th January 2018

Comments

Post a Comment

Popular posts from this blog

New income tax slab and rates for new tax regime FY 2023-24 (AY 2024-25) announced in Budget 2023

By
  Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income up to Rs.7 lakh will not pay any taxes   The income tax slabs under the new income tax regime will now be as follows: Rs 0 to Rs 3 lakh - 0% tax rate Rs 3 lakh to 6 lakh - 5% Rs 6 lakh to 9 lakh - 10% Rs 9 lakh to Rs 12 lakh - 15% Rs 12 lakh to Rs 15 lakh - 20% Above Rs 15 lakh - 30%   The revised Income tax slabs under new tax regime for FY 2023-24 (AY 2024-25)   Income tax slabs under new tax regime Income tax rates under new tax regime O to Rs 3 lakh 0 Rs 3 lakh to Rs 6 lakh 5% Rs 6
Post a Comment
Read more

Jaitley plans to cut MSME tax rate to 25%

By
Income tax for companies with annual turnover up to ?50 crore has been reduced to 25% from 30% in order to make Micro, Small and Medium Enterprises (MSME) companies more viable and also to encourage firms to migrate to a company format. This move will benefit 96% or 6.67 lakh of the 6.94 lakh companies filing returns of lower taxation and make MSME sector more competitive as compared with large companies. However, bigger firms have shown their disappointment since the proposal for reducing tax rates was to make Indian firms competitive globally and it is the large firms that are competing globally. The Finance Minister foregone revenue estimate of Rs 7,200 crore per annum for this for this measure. Besides, the Finance Minister refrained from removing or reducing Minimum Alternate Tax (MAT), a popular demand from India Inc., but provided a higher period of 15 years for carry forward of future credit claims, instead of the existing 10-year period. “It is not practical to rem
1 comment
Read more

Don't forget to verify your income tax return in August: Here's the process

By
  An ITR return needs to be verified within 120 days of filing of tax return. Now that you have filed your income tax return, remember to verify it because your return filing process is not complete unless you do so. The CBDT has reduced the time limit of ITR verification to 30 days (from 120 days) from the date of return submission. The new rule is applicable for the returns filed online on or after 1st August 2022. E-verification is the most convenient and instant method for verifying your ITR. However, if you prefer not to e-verify, you have the option to verify it by sending a physical copy of the ITR-V. Taxpayers who filed returns by July 31, 2023 but forget to verify their tax returns, will get the following email from the tax department, as per ClearTax. If your ITR is not verified within 30 days of e-filing, it will be considered invalid, and may be liable to pay a Late Fee. Aadhaar OTP | EVC through bank account | EVC through Demat account | Sending duly signed ITR-V through s
Post a Comment
Read more