FinMin to meet PSU banks on Apr 28 to review stalled projs

Concerned over rising bad loans in the infrastructure sector, the Finance Ministry has called a meeting of heads of public sector banks on April 28 to chalk out a roadmap for clearing bottlenecks that hamper implementation of large projects.

"We will be doing segment wise analysis of stalled projects and understand what are the impediments and what kind of policy support required to facilitate implementation of these large projects," Secretary Department of Financial Services Hasmukh Adhia told PTI.

"Large size stalled projects of infrastructure sector, including power, surface transport, steel, shipping, would come up for review in the meeting at Mumbai which will also be attended by senior officials of ministries concerned," he said.

This meeting would help the Department to crystalise the actions required by banks, Finance Ministry and other central ministries as well as support required from the RBI, he added.

One of the major reasons for rising non-performing assets (NPAs) for PSU banks is non-implementation of infrastructure projects for reasons like, fuel linkage, environment clearance, land acquisition issue etc. The level of NPA and the stressed projects of the public sector banks has been showing an upward trend in the last four quarters.

As per RBI data, Gross NPAs of the PSU banks have gone up to Rs 2,60,531 crore as on December, 2014. Gross NPAs of public sector banks rose sharply to 5.33 per cent in September 2014 as compared to 4.72 per cent of total advances at the end of March 2014.

As per an estimate, the impact of cancellation coal block allotment on public sector banks due to likely stoppage of production of power plants is estimated at Rs 96,484 crore.