New Delhi: Finance Minister Arun Jaitley on Friday said setting up a “bad bank”, which is a kind of asset reconstruction company to buy non-performing assets of banks at market price, could be a possible solution to deal with the festering problem of NPAs.
“It (bad bank) is also a possible solution. We will take it on board for discussion,” Jaitley said here at the post-Budget interaction with India Inc.
The Economic Survey 2016-17 has suggested establishment of a “bad bank” to deal with the NPA issue.
“The problem has consequently continued to fester: NPAs keep growing, while credit and investment keep falling. Perhaps it is time to consider a different approach — a centralised Public Sector Asset Rehabilitation Agency that could take charge of the largest, most difficult cases, and make politically tough decisions to reduce debt,” the survey noted.
However, Jaitley added he did not want to comment in detail on the subject as he did not want the honest taxpayer’s money to be used for such a structure which will buy the NPAs, which have been created by tax evaders.
“We want the banking mechanism also to be pro-active and major debtors to take a pragmatic approach to resolve their NPAs,” he added.
The government announced Rs 10,000 crore for the recapitalisation of public sector banks in 2017-18.
On the issue limiting the anonymous cash donation to a political party from the earlier Rs 20,000 to Rs 2,000, Jaitley said the step though gives the donor the option of remaining anonymous, both ends of the transaction will happen through the banking system.
On Goods and Services Tax (GST), Revenue Secretary Hasmukh Adhia said that the government was targeting to finalise the drafts of the three GST bills — Central GST (cGST), Integrated GST (iGST) and the Compensation Law — by March 31.
“We expect to finalise the draft bills of GST by March 31 so that they can be take to Parliament for approval. In May and June we will do the fitment of various commodities into the four GST rate slabs,” Adhia said at the same event.