Budget 2022: FM Nirmala Sitharaman says Initiated bad bank process to reduce PSU banks NPAs

In order to reduce the overall non-performing assets of public sector banks, the government has initiated the Bad Bank process, the finance minister Nirmala Sitharaman in her Budget 2022 speech said on Tuesday in the Parliament. 

She in her statement said, “We have initiated the bad bank process under National Asset Reconstruction Company Limited (NARCL) has been initiated.” 

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Earlier in January, the NARCL or bad bank has received all approvals to commence operations, and a total of 38 NPA accounts worth Rs 82,845 crore have been identified to be transferred to NARCL initially, State Bank of India Chairman Dinesh Khara said on Friday, as per the PTI report. 

The transfer of 38 stressed accounts will happen in a phased manner, with banks agreeing to transfer 15 NPA accounts worth Rs 50,000 crore in the first phase by March 2022, Khara said. 

“In the phase one, about 15 (stressed) accounts aggregating to Rs 50,000 crore are expected to be transferred to the NARCL. We are trying to have these accounts transferred within this financial year after completing all the required processes,” Khara had told reporters. 

According to Economic Survey 2021-22, the GNPA of public sector undertaking banks has improved to 8.6 per cent as of September 2021 as compared to 9.4 per cent year-on-year (YoY).