Government is expecting state-run banks to cut bad loans by Rs 3 lakh crore in financial year 2019, reported The Economic Times.
As per the report, the government expects that the banks will bring a check on their bad loans through debt resolution under the Insolvency and Bankruptcy Code (IBC).
Officials have said that if the banks follow the plan, public sector banks (PSBs) won’t require any additional capital infusion to improve their performance and can raise resources through the sale of non-core assets, the report said.
“In some cases, promoters have already started paying off their debts for fear of losing their company, which has led to reduction of debt… in some cases, banks expect to recover higher amounts than their exposure,” an official was quoted saying in the report.
As per the report, an official from the union finance ministry too said that the government will not infuse any additional capital in to banks than what they have currently done.
The report added that the government has already disbursed around Rs 88,000 crore of the Rs 1.53 lakh crore capital infusion program until financial year 2019.
First Published: IST