Finmin Asks Banks To Monitor Top 20 IBC Cases

Going forward, the finance minister would also review the functioning of banks on various aspects

The Finance Ministry on Friday asked heads of public sector banks (PSBs) to monitor and review all cases, especially the top 20 Insolvency and Bankruptcy Code cases as part of the management of their bad assets.

During a meeting with managing directors and CEOs of public sector banks (PSBs), Financial Services Secretary Vivek Joshi asked them to review the top 20 cases monthly for their resolution.

Besides, he also asked them to monitor cases long pending for admission and resolution under the Insolvency and Bankruptcy Code (IBC).

During the meeting, banks also flagged the requirement for having a working collaboration amongst banks' legal teams, the National E-Governance Services Limited (NeSL) and the Insolvency and Bankruptcy Board of India for swift, efficient and time-bound resolution.

Earlier during the day, Joshi presided over a workshop on 'customer service', the finance ministry said in a statement.

During the workshop, a few banks presented the initiatives undertaken by them to enhance customer service experience, while constantly monitoring customer feedback via multiple channels, and enabling better contact-center experience.

It was emphasised that PSBs can take initiatives across multiple pillars like institutionalised customer service measurement (process efficiency, channel mix, complaint management, etc.), developing a customer centric mindset across entire organisation, adopting technology for improving customer service (embedding technology in product and customer processes) and setting service delivery standards, it said.

In another meeting, Joshi also reviewed the working of the National Asset Reconstruction Company Limited (NARCL).

During the course of the meeting, NARCL and banks flagged challenges faced by them and it was observed that lenders are required to set up system and processes to efficiently assign potential debt to NARCL.

"Further, deliberations of processes that could lead to minimising the time taken for acquisition process were done. The issues pertaining to inter-se creditors arising due to differential security structures, additional collaterals, exclusive securities, which lead to longer time frame, were also discussed," it said.

Going forward, the finance minister would also review the functioning of banks on various aspects.

NARCL, a government entity, was incorporated in 2021 with a majority stake held by Public Sector Banks and the balance by private banks with Canara Bank being the sponsor bank.

It is registered with the Reserve Bank of India as an Asset Reconstruction Company under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

The Cabinet in 2021 cleared a proposal to provide a government guarantee worth Rs 30,600 crore to security receipts issued by NARCL.

As per the provision, NARCL would pay up to 15 per cent of the agreed value for the bad loans in cash and the remaining 85 per cent would be government-guaranteed security receipts.

Finance Minister Nirmala Sitharaman in her Budget 2021-22 speech announced that the government intends to set up a bad bank as part of the resolution of bad loans worth about Rs 2 lakh crore in the banking system.

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