Banks start debt restructuring of Rs 1 lakh crore: Jayant Sinha

NEW DELHI: In view of mounting bad loans in the banking system, Minister of State for Finance Jayant Sinha today said banks have initiated 10-12 strategic debt restructurings involving about one lakh crore.

"We have given freedom to banks to bring in strategic partners in case of stalled project. We have enabled banks to undertake Strategic Debt Restructuring (SDR). Under this there are some 10-12 cases wherein new promoters have been brought in and about Rs 1 lakh crore loan is being restructured," he said.

During UPA's time, Sinha said there was " policy paralysis" as well as crony capitalism.

"We have to make banks stronger. We have also taken many steps to ensure that this does not get repeated," Sinha said during the Budget Aaj Tak programme .

As on September 2015, the gross NPAs of public sector banks had increased to Rs 3.01 lakh crore as against Rs 2.67 lakh crore in March.

Sinha further said private investment will revive once the government's steps to address the bad debt problem as well as sector specific constraints bears fruit.

He said the government has already stepped up investment in railways and irrigation and private investment will soon follow.

"Private investment will also increase once we solve the NPA problem," Sinha said.

Sinha said the steps to address the NPA problem include the UDAY scheme to address power sector problems as well as steps taken to ease finding the road sector.