Union Finance Minister Arun Jaitley backed the creation of proper atmosphere to enable public sector banks to go after bad loans, pledging a structure that will embolden them to hammer out settlements without fearing the investigation of such deals later on.
According to report that appeared in ‘The exonomic Times’, Jaitley also said two important laws would be revised to further empower banks to recover their outstanding dues.
"We have to create both political and economic environment for banks to have a healthy recovery. And that can't take place in an environment of suspicion," Jaitley said in an interaction in New Delhi.
Centre will strengthen legislative outline to help clean up the balance sheets of public sector banks.
"We are going to amend the Sarfaesi (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) and DRT (debt recovery tribunal) laws in order to make recoveries faster, so they have to come in tune with the bankruptcy law," Jaitley was quoted as saying.
These will strengthen the bankruptcy law, which is likely to be passed in Budget session.
He said bank managements can be authorised to seek settlements by modifying Prevention of Corruption Act and creating an ombudsman-like mechanism.