Sashakt: 5 Pronged Strategy To Deal With NPAs

The Sunil Mehta Committee, set up to look into the faster resolution of stressed assets, has recommended the creation of an asset management company for the resolution of stressed loans worth more than Rs500 crore. Finance minister Piyush Goyal announced that government has accepted a report submitted by a committee of bankers led by Punjab National Bank chairman Sunil Mehta.

Sunil Mehta committee on bad loans resolution has recommended a five-pronged strategy Project ‘SASHAKTto deal with Non-performing Assets in the country’s banking system. The five-pronged strategy includes:
1. SME resolution approach, 
2. Bank-led resolution approach, 
3. AMC/AIF led resolution approach, 
4. NCLT/IBC approach, and 
5. Asset-trading platform. 
The Mehta Committee has further proposed a Bank Led Resolution Approach (BLRA) for loans between Rs 50 and Rs 500 crore. Under the BLRA approach, financial institutions will enter into an inter-creditor agreement to authorise the lead bank to implement a resolution plan in 180 days. 

Source- The Economic Times

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