New Delhi, March 11 (IANS): The government is planning various measures to revive stalled projects and deal with the problem of state-run banks' rising non-performing assets (NPAs) or bad loans, Minister of State for Finance Jayant Sinha said on Wednesday.
"We discussed the NPA issue, the situation in stalled projects. There are a variety of measures that we are planning to undertake as far as stalled projects are concerned," he said after a meeting called by Finance Minister Arun Jaitley to review the performance of public sector banks.
"And also we are thinking about the ways in which resolution of the NPA situation can be done more speedily," he added.
The NPAs, or bad loans, of public sector banks rose to 5.33 percent of total advances in September 2014, from 4.72 percent in March 2014. Stalled projects have been adding to banks' NPAs.
As per the ministry's latest Economic Survey, stalled projects as on December-end amounted to Rs.880,000 crore-worth.
In this connection, the finance ministry said of Wednesday's meeting that "it was expected that some actions on the part of the banks, identified at Gyan Sangam (Bankers Retreat, in Pune) in January, 2015, relating to risk management and asset quality, would be taken by them (banks)".
"The government is in the process of establishing six new Debt Recovery Tribunals (DBTs) to speed-up the recovery of bad loans of the banking sector," the ministry said.
A ministry release had earlier said that during the meeting, the finance minister "will review the public sector banks' performance with regard to overall credit growth".
Replying to questions on the impact of the rate cut by the Reserve Bank, Sinha said some banks have already brought down the rates.
"We tried to understand exactly how the banks are thinking and the banks pointed out what they have already done. As far as retail loans are concerned they have already brought down rates a fair bit," he said.
The RBI has cut the repo rate at which it lends to commercial banks by 0.5 percent in the last two months, but the banks have not followed up on that yet by reducing their lending rates.
Last week, the RBI reduced the repo rate from 7.75 percent to 7.5 percent. This was the second rate cut after January 15, when the central bank had also cut the rate by a similar 25 basis points.