Worrisome news for banking sector for the reason bad loans figure in private sectors are raising and public sector banks (PSBs) are raising more sharply in comparison with private sector banks.

The gross NPAs of PSU banks’ in the first nine months of the current fiscal increased to Rs 6.06 lakh crore by December 31, 2016, from Rs 5.02 lakh crore during 2015-16.

For private sector banks, gross NPAs rose to Rs 70,321 crore by December 31, 2016, from Rs 48,380 crore as on March 31, 2016.

The bjp government contemplating amendment in Banking regulation act which gives more teeth for bankers decision making in offering settlement package to the defaulters and expecting this solution to redress the raising bad loans.

According to government sources the amended Banking Regulation Act will empower the RBI as per below :

Firstly, the amended Act will enable RBI to set up oversight panels that will shield bankers from later action by probe agencies looking into loan recasts.

This is important as banks till now have been reluctant to resolve NPAs through settlement schemes or sell bad loans to asset reconstruction companies for fear of being hauled up by investigation agencies.

With the changed law RBI will be able to give specific solutions for specific cases and also, if required, look at providing relaxation in terms of current guidelines.

The amended Act may also provide for overhauling of the joint lenders’ forum (JLF) guidelines to facilitate quick decision making as it has become a delaying tool for big defaulters instead of being a resolution mechanism.

As per the existing JLF rules, if a restructuring package is okayed by 75 per cent of creditors by value and 60 per cent of creditors by number, other banks have to go along with it.

However financial experts may bound to question will this amendment in act will gives leverage to industry for specific solutions ?!! Does this extra powers to banking personals help the mission of brining down NPAs or concentrate more on bringing down Fiscal and revenue deficit and bringing more cash flow in to the system will improvise in the longer run .

The raise of bad loans happening at alarming phase for the past nine months at the rate of 14000 Crores each month is going to bring fresh economic problems in the days to come when one has to take consideration of the 2015-2016 actual Indian budget Revenue deficit of 342736 Crores Rupees and 2015-2016 actual Indian budget fiscal deficit of 532791 Crores Rupees .

Chasing mallaya to uk in order to get 1.3% of India now accumulated NPA back might not only make headline , breaking news ., but sure hot and sour peppy TV debates ., is that enough ?! .. what about balance 98.7% protected NPA ians in India .

Market Sources confirming 10 corporates cause 60% of NPAs Why not Government of India expose those top 10 NPA ians to start with ?! If government does this will bring more fruitful results rather than amending laws and giving powers to bankers that in future may not only open bandora box of fresh scams but bound to facilitate legalised money laundering.