BENGALURU: Finance Minister Mr. Arun Jaitley warned bank defaulters by saying that they will not be allowed to sleep well after troubling the banks. As reported by the Business Insider website, the Finance Minister was speaking amid to news that 10 state-run banks are suffering losses of more than 15000 crore rupees in first quarter of the current fiscal year. He has promised considerable capital support to the banks and has alerted bank defaulters to stay ready for some severe actions.

Arun Jaitley rejected the suggestions that the non-performing assets of public sector banks (PSBs) are eminent business personalities who were not able to repay their loans, not other frauds that led to losses. While on his visit to Japan for attracting investors, he cleared that these losses were due to previous bad debts and currently banks are earning good profits at its operational level. He said that after looking at the balance sheets it is clear that PNB and SBI had good profit operationally, but the provisioning is working as a cover for bad debt.

The Central Government cleared their stance by declaring a figure in the budget and the ministry is ready to increase that amount if required. The Finance minister is going to fully support the banks by strengthening them wherever required. While asked about government policies to strengthen banks, Jaitley said that RBI recognized mechanism strategic debt restructuring (SDR) is there along with the bankruptcy law for bank empowerment. He said that recovery laws like Securitisation and Debt Recovery Tribunal (DRT) would create a stage of scarcity for loan defaulters.

Asserting that all non-performing assets are not related to bank frauds, but might be in some cases that would be due to sectoral losses or business losses. Jaitley said that situations would start changing gradually with the decrease in sectoral problems. He deliberated an example of PNB, which made 12000 crore rupees operational profit in the last financial year, but due to NPA provisioning it is declared as a loss. The Finance Minister is going to conduct a meeting for a quarterly performance review with the heads of Financial Institutions and PSBs, against the backdrop of record public losses and mounting bad loans.

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