Mumbai: Chanda Kochhar, ICICI Bank's chief executive officer and managing director, has welcomed Modi government's move to effect changes in Banking Regulation Act that will give the Reserve Bank of India sweeping powers to deal with toxic loans.
Kochhar in an interview that she gave to ET now she has said that the ordinance related to bad loans faced by public sector banks will help lenders solve the vexed problem in a time-bound manner.
As of December 2016, the public sector banks were sitting on a huge stockpile of bad or toxic loans worth over Rs 6 lakh crore. The figure zoomed in past few years as earlier the banks had recorded Rs 1 lakh crore in bad assets.
So far, the banks were unable to tackle such a mammoth debt on their balance sheets that acted as a precursor for government effecting an amendment in Banking Regulation Act so as to give RBI enabling powers.
"The ordinance actually authorises the government to empower RBI to direct the banks in many ways,' Kochhar told the channel. She also says RBI's directives to banks will expand scope of overseeing committees that would be formed to deal with the NPAs problem.
"The total NPA as well as the restructured base for the banks is at about Rs 10 lakh crore, but almost 40 per cent of that is really the top 50 cases of NPAs," she added. Kochhar backed taking up of large NPAs cases on a priority basis.
