Banks discuss strict measures to implement for defaulters

Banks in India discussed some strict measures against loan defaulters, following a directive by the Finance Ministry. The ministry has prepared a list of 50 defaulters, in which diamond company Winsome Diamonds is amongst the top three, report say.

In a meeting between the bankers to discuss the list, the bankers suggested that a borrower should not be allowed to open a current account with a different bank even if a loan is standard in the base bank, a non-performing loan in one banks should be classified by all consortium members as a non-performing asset NPA, all consortium lenders to sell NPAs to one ARC, not separately, once a loan was sold, monitoring the ARCs was important and the banks should discuss options for ARC to infuse funds in ailing units, reports suggest.

As per rating agency Icra, the gross NPAs for public and private sector banks as a percentage of total advances rose in the past year, from 3.3 per cent to 3.9 per cent and the report predicts the gross NPAs to range between 4 percent to 4.2 per cent by March 2015, reports suggest.