Finance Minster Arun Jaitley will on Friday hold a crucial pre-Budget interaction with chief executives of banks, financial institutions and non-banking finance companies in the Capital.

This meeting assumes significance as it comes in the backdrop of the banking system facing a huge stressed loan portfolio of over ₹10 lakh crore and the government having put in place an insolvency resolution framework for companies.

Already 12 companies — accounting for 25 per cent of stressed assets in the banking system — have been referred by banks (on the advice of the Reserve Bank of India) to the National Company Law Tribunal (NCLT).

Another 22 out of the second list of 28 cases have been reportedly referred to the NCLT for initiation of resolution process provided under the Insolvency and Bankruptcy Code (IBC).

Besides the raging non-performing assets (NPA) issue, sources said the Friday meeting may also discuss the way forward for the controversial Financial Resolution and Deposit Insurance (FRDI) Bill, which provides the resolution framework for ailing financial firms, including banks, insurance companies and stock exchanges.

Already, there is widespread opposition, especially by bank unions, to this Bill as it could compromise depositors’ interests in case of a ‘bail-in’ situation in banks.

The Ministry, however, is of the view that the proposed Bill will only enhance depositors’ interests.

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