13 banks reported profits

The Government’s extensive reforms have restored financial health of banks, with the gross Non-Performing Assets (NPAs) of Public Sector Banks (PSBs) declining from Rs.8.96 lakh crore in March 2018 to Rs.7.27 lakh crore in September 2019.

This has also raised the banks provision coverage ratio to highest level in seven years with as many as 13 reporting profits in the first half of year of 2019-20, said the Finance Ministry on 28 Dec 2019.

Following the Essar resolution decision, banks have recovered Rs.38,896 crore. This is in addition to Rs.4.53 lakh crore recovered in the last 4½ years.

PSBs have attached assets worth over Rs.2.3 lakh crore over the last three financial years and to enable online auction by banks of attached assets transparently and cleanly for improved realisation of value, eBक्रय, a common e-auction platform launched on 28 Dec 2019 by Finance Minister Nirmala Sitharaman.

The platform is equipped with property search features and navigational links to all PSB e-auction sites, provides single-window access to information on properties up for e-auction as well as facility for comparison of similar properties.

As on 27 Dec 2019, a total of 35,000 properties had been uploaded on the platform by PSBs.

To strengthen banks, in addition to the recent infusion of Rs.60,314 crore, additional approved infusion of Rs.8,855 crore would be released shortly. So far, Rs.4,360 crore has been given to Indian Overseas Bank, Rs.2,153 crore to Allahabad Bank, Rs.2,142 crore to UCO Bank and Rs.200 crore to Andhra Bank.
Having improved asset quality and internal resource generation, PSBs are now fully poised to support prudential credit growth.

Bankers were assured that prudent commercial decision-making would be protected during the 28 Dec 2019 review meeting by the Minister.

To allay any apprehensions in this regard and to take feedback, Director, CBI also attended the meeting.

It was decided that:

CBI would develop a mechanism as recently introduced for income tax notices, so that CBI notices carry a registration number to avoid any scope for unauthorised communication and consequent harassment.

While pursuing criminal action against those responsible, the agency shall be sensitive to the distinction between genuine commercial failures and culpability. It was also noted that there is need for preserving the value of the business enterprise by treating it on a separate footing from culpability of individuals, if any.

PSBs may report instances of fraud through e-filing of FIRs on a designated email address of CBI so as to avoid scope of any arbitrage due to information asymmetry.

CBI would create a dedicated phone number on which any person could give information regarding any undue harassment by the investigative machinery.

Banks were also advised to ensure rigor and adherence to objective standards in selection of forensic auditors and devising objective SOPs for carrying out of forensic audit.

To this end, the Indian Banks’ Association was requested to:

strengthen the forensic auditor empanelment process;

put in place robust arrangements for assessing adherence to standards by forensic auditors; and

tie up with CBI for training forensic auditors. fiinews.com