Intermediate mechanism to resolve bad loan issue soon: Vinod Rai

An intermediate mechanism to resolve the issue of bad loans will soon be set up, said Vinod Rai, Chairman of Banks Board Bureau. He said topmost on the list of priorities will be sorting out the issue of stressed assets. This mechanism is being envisaged as a method to examine processes that could help banks settle their bad loans.  He said the mechanism could be put in place in a fortnight or a maximum of three weeks from now.The mechanism will be in the domain of banks and outside the Bank Board Bureau (BBB), he said.  "It will give a lot of comfort to bank decision makers and it will be very credible," he said.  Currently, the gross NPAs of state-owned banks went up to over 7 percent as of December 2015 from 5.43 percent in March 2015. 

He added that BBB will be focussing on vacancies and the lending process. Decisions regarding a holding company and consolidation will come in due course of time, he said.  Watch video for more...