Chennai: Union Finance Minister Piyush Goyal said banks should not classify a borrower as a defaulter if they do not get dues paid from entities like discoms.
The comments came a day after the Reserve Bank of India (RBI) made it clear that it will not be having a relook at a contentious circular about recognising of bad assets. The circular was issued on 12 February last year.
“Law cannot be blind, wherein in 90 days arithmetically it becomes an NPA (Non Performing Asset). We will also discuss this and we hope to resolve it quickly,” Goyal said, speaking to industry representatives in a post-budget interaction at the BSE.
“I think it is worth discussing with the Reserve Bank that if a payment is overdue and discom is not paying its bill, then we will have to think about NCLT and NPA,” he said.
He cited the case of a power producer to which a distribution company owed money, stating that just because the discom did not pay up, the power producer does not become a defaulter.
Goyal said the Government could ensure capital markets watchdog Sebi withdraws a proposal to disclose every default by listed companies, and hinted that similar measures will be taken up with RBI as well.
The Finance Minister also said there is a need for specialised development finance institutions like IDBI, IFCI and ICICI and said asset liability mismatch results in difficulties for the banking system to support the infrastructure sector.
Goyal also said the Government is also trying to get the remaining eight banks out of the restrictive prompt corrective action (PCA) framework.
Recently, sections of the industry have moved the Supreme Court for special treatment to the power sector when it comes to classification of NPAs.