Concerned over rising bad loans, Finance Minister P Chidambaram today asked banks to take firm steps to recover loans saying the country cannot afford to have "affluent promoters and sick companies".
"We wish banks take firm steps to recover NPAs. Promoters have to bring in additional money and companies have the duty to pay back loans," Chidambaram said.
He was talking to reporters after meeting the heads of PSU banks and financial institutions here.
The Finance Minister said recovery has improved in the past one or two months and banks will take more steps to deal with the rising NPAs without hurting the industry.
"We cannot have an affluent promoter and a sick company. Promoters must bring in money ... Without doing anything that will kill the business of industry, banks will have to take steps to recover the NPAs," he said.
Gross NPAs of PSU banks have risen from Rs71,080 crore as on March 2011, to Rs1.55 lakh crore as on December 2012.
He further said that stalled projects in sectors like power, coal, iron, steel and road transport is a matter of worry.
As many as 215 projects with an investment of Rs7 lakh crore are currently stalled and banks have disbursed about Rs54,000 crore loan towards it, Chidambaram said.
As far as new projects are concerned, he said, they are also in the same five sectors.
There are 126 new projects for which the outlay is Rs3.55 lakh crore and amount sanctioned by banks against these was Rs43,000 crore.
"Real problem is in road and power. There are 68 new projects in the road sector. There are 40 new projects in the power sector. We have to get them going," he said adding that the ministries concerned would look into the matter so that projects are accelerated.