Chairman Vinod Rai and members of the Banks Board Bureau have made the recommendations based on interactions held with eligible candidates from public sector banks.
The Chief Economic Advisor said that in any democratic political system, it is difficult to write down debts which favour the private sector.
Vinod Rai, Chairman of the Banks Board Bureau, said that while bad banks had been a success in Spain and Indonesia, its success in India would depend on appointing qualified personnel to take a call on valuations.
The government will further infuse around Rs 8,000 crore into 10 weak public sector banks in the current fiscal as it needs to meet up with set targets for the current fiscal.
Expressing concerns over mounting bad loans, Banks Board Bureau (BBB) Chief Vinod Rai has written to Finance Minister Arun Jaitley and Prime Minister's Office underlining the tardy progress made by state-owned lenders in resolving the issue of Non Performing Assets.
The National Stock Exchange board is wary of its new CEO Vikram Limaye‘s Board of Control for Cricket in India‘s (BCCI) commitments and has approached Vinod Rai-led panel for same, sources said.
"It (Rs 10,000 crore capital infusion) should be enough, because government would probably be going for rights issue also. So, the Rs 10,000 crore will be able to leverage much more from the market," Rai told reporters at the sidelines of the launch of a new Bandhan Bank branch in Delhi today.
Terming consolidation in public sector banks a "long drawn process", Banks Board Bureau (BBB) chief Vinod Rai said it should gather momentum in 2-3 years.
To ensure greater stability and accountability, Banks Board Bureau (BBB) chief Vinod Rai today suggested that managing directors of the public sector banks should be appointed for minimum 6 years.
The government, however, needs to put in place policies that ensure that black money generation doesn‘t happen in future, Banks Board Bureau Chairman Vinod Rai said.
Banks Board Bureau chief Vinod Rai said that the managements of banks are reluctant to take decisions on recasting debt in spite of the concerns that rising bad loans are holding back the country‘s economy.
Indian Railways' massive infrastructure programme includes redevelopment of 408 major stations through private sector participation via online auctions.
"The selection of the new CEO & MD of IOB was made long time back and there was a particular issue on which it got held up and now that has been clarified.
Exhorting lenders to analyse the root cause of the bad loans problem, Banks Board Bureau Chairman Vinod Rai today said there is need for a "banking redux" where sectors like infrastructure restart getting credit, failing which "we would be stifling growth".
The former comptroller and auditor general (CAG), who is also working to address the bad loan menace, has said the country has become all too familiar with the nexus between "big business and politics" even as he believes that there is a new wave of transparency.
At the book launch event of former Reserve Bank of India Governor Duvvuri Subbarao's Who Moved My Interest Rates, former Finance Minister P Chidambaram took part in a panel discussion and offered his take on some of contentious issues raised by the ex-central bank chief.
The consolidation of more banks may begin from next fiscal as the priority today is to unlock the jammed lending system with the Non-Performing Assets (NPAs) sitting over balance sheets of banking institutions, Banks Board Bureau chief Vinod Rai said today.
Entire focus is on cleaning balance sheets, so that loaning process starts immediately, says Vinod Rai, Bank Board chief.
The gross non performing assets of scheduled commercial banks rose to 7.6 percent in March 2016 from 5.1 percent in September 2015.
"So, we want them in the lending market at the earliest and in the next year after having cleaned up their books of any stressed asset," Rai told PTI, stressing the urgency to revive the infrastructure financing by public sector banks as the momentum of trillion-dollar development picks up in India.
Vinod Rai, the veteran bureaucrat appointed this year to run the new Banks Board Bureau, told Reuters the government stood ready to inject fresh funds beyond the USD 3.7 billion earmarked in the 2016/17 Budget.
Vinod Rai, Chairman of Banks Board Bureau, said the mechanism could be put in place in a fortnight or a maximum of three weeks from now.
The Bank Board Bureau at its maiden interview for appointments of MDs & CEOs at three state-run banks held in Mumbai on May 16 met as many 10 candidates, according to sources
"All of them are suffering from stressed assets. They are across infrastructure sectors. But each bank has a strategy to resolve which would be different from every other bank. That is what we discussed," he said after a day-long meeting with heads of PSU banks here.
State Bank of India Chief Arundhati Bhattacharya on May 13 said the lender has discussed various issues including bad loans with the Bank Board Bureau (BBB).