The Government has set up a full-fledged Recovery Section to focus on recovery in the Department of Financial Services under Ministry of Finance in November, 2012 to monitor NPAs of Public Sector Banks (PSBs) with special emphasis to reduction in NPAs including review of top NPA accounts, recovery, write-off, up-gradation and restructuring of advances, NPA reporting mechanism, etc.
Reports on various aspects are sought from the Reserve Bank of India and all PSBs and monitored at the highest level in the Department.
The Section deals with the issues relating to Recovery of Debts due to Banks and Financial Institutions (RDDBFI) Act, 1993 & Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 and their Rules, Central Registry, Credit Information Companies, Securitisation and Foreclosure, resolution/recovery of Non-Performing Assets (NPAs) of Public Sector Banks (PSBs), One Time Settlement / Compromise of loan accounts etc.
As per the data made available by the Reserve Bank of India (RBI), Gross NPAs of the Scheduled Commercial Banks (SCBs), especially Public Sector Banks (PSBs) have shown an increase during the recent years. On account of good economic conditions, establishment of DRTs and enactment of SARFAESI Act, the GNPAs ratio of PSBs steadily declined from 13.11per cent in 2000-01 to 2.10 percent in 2008-09 and GNPA ratio of SCBs steadily declined from 12.04 per cent to 2.45 percent. NPAs have risen to 3.84% as on March, 2013, 4.72% as on March 2014, 5.29% as on Sept 2014 and further to 5.64%(provisional) as on Dec 2014 in respect of PSBs and the same have risen from 3.42% as on March 2013, 4.11% as on March 2014, 4.54% as on Sept 2014 and further to 4.79 per cent (provisional) as on Dec 2014 in respect of SCBs due to sluggishness in the domestic growth during the recent past, slowdown in recovery in the global economy and continuing uncertainty in the global markets leading to lower exports of various products like textiles, engineering goods, leather, gems etc.The PSBs continue to be under stress on account of their past lending. Taking GNPA and restructured advances together the stress on PSBs is 13.03% to total advances as on December, 2014 (12.90% as on Sept, 2014)