New Delhi: After concluding the Annual Review Meeting of public sector banks on Tuesday, Finance Minister Arun Jaitley said that the government is expecting a recovery of around Rs 1.8 lakh crore worth of bad loans during the current fiscal. According to a report by news agency IANS, these recovery will be done through measures such as insolvency and bankruptcy code and debt recovery tribunals. Jaitley said that with several major NPA cases at the penultimate stage of the resolution process, there was optimism among banks as well as the Financial Services Department about the recovery of bad loans.

Even the Financial Services Secretary Rajeev Kumar asserted that these banks expected to recover Rs 1.8 lakh crore worth of bad loans in the current financial year as opposed to around Rs 75,000 crore in the last fiscal. Jaitley said the bad loans of public sector banks were on a decline as recoveries had picked up after a challenging period of last several years.

“I can confidently say that we are on the right track to overcome what is traditionally described as legacy issues," the Finance Minister said. In his statement, Jaitley was also critical of the previous UPA government and called it responsible for the non-performing asset (NPA) crisis. He said despite the early days of Insolvency and Bankruptcy Code (IBC), the impact of the new law was visible through the optimism of bankers.

"After a prolonged period of several quarters when profits of banks went into provisioning (for NPAS), we saw net profit in the balance sheets of banks in the last quarter,” news agency IANS quoted Jaitley as saying.

Jaitley further claimed that summing up the last quarter and projections of next few, it is clear that the NPAs are decreasing and recoveries has fastened over the period of time. Even the credit growth he said has picked up. The BJP leader also assured that there was greater confidence among the bankers which will lead to further enhancement of banking activities in the country.