No bad banking plan, but government now has a five-point strategy to deal with APMs: FM Piyush Goyal

Sunil Mehta's Committee on Bad Debt Resolution recommended a five-pronged strategy for managing nonperforming badets in the country's banking system, Finance Minister Piyush Goyal announced today. Minister of Finance said that the committee did not recommend creating a bad bank.

"Sunil Mehta's Bad Debt Resolution Panel presented a balanced and comprehensive" Sashakt "project, a five-pronged strategy for managing stressed badets," said Mr. Goyal.

The five-part strategy includes: an SME resolution approach, a bank-guided resolution approach, an AMC / AIF-driven resolution approach, an NCLT / IBC approach, and a trading platform. badets.

Explaining the government's plan to tackle the problem of bad debts of banks, Finance Minister Piyush Goyal said that an independent badet management company will be created and that the committee did not recommend creating a bad bank.

He said that the AMC-led approach would be adopted for the resolution of loans above Rs 500 crore. Financial institutions will enter into an agreement between creditors to authorize the lead bank to implement a resolution plan within 180 days. "If no resolution would be found in 180 days, the institutions would move to NCLT," he added.

He said that the government plans to focus on reversing badets in a way that will create jobs, the proposals are aligned with the process and laws of IBC.