In the last two years RBI has introduced several measures to address the stressed assets in the financial sector including creation of JLF, 5/25 scheme, SDR etc. Government of India has also initiated measure to ease the stress in the economy including passing the much awaited Bankruptcy code. Banks have made all out efforts to identify, assess and address large NPAs particularly in regard to infrastructure loans and project finance.
External Environment also affects banks credit assets through global slowdown, fall in domestic demand, policy logjam & disputed contracts. Internal environment affects banks through either governance deficit, poor credit appraisal, weak risk management, overdependence on debt instead of equity, issues in infra financing particularly highways and power like faulty fuel supply agreements, pass through arrangements, termination payments and chasing quick growth etc.
Therefore, improving banks management and governance of NPAs is of utmost importance. Issues of sale of NPAs to ARCs and implementing 5/25. SDR etc. by banks are also of vital importance. A deeper analysis of resolution mechanisms and legal complexities would be very timely for the banking system.
The objective of the program is to deliberate and reflect on strategizing handling of stressed assets, provisioning, sale of assets, role of ARCs etc. which are currently bothering the banking system. The newly passed Bankruptcy code and its implementation would also be discussed.