Bank loan news: When the capital does not go to the more qualified borrowers, then one has to bear the cost of that opportunity. He said that it is the duty of the financial sector to ensure proper allocation of capital in the economy.
Bank loan news: Chief Economic Advisor (CEA) KV Subramanian on Tuesday exhorted banks and financial institutions to refrain from distributing loans in Yari-Dosti and pay attention to high quality standards while giving loans. Could help the country to build a $ 5,000 billion economy. According to the news of PTI, he admitted that in the early 1990s, the Indian banking sector had to face the problem of giving loans of poor quality. Especially, loans of large amount were given without adhering to the high quality standard. These loans were given to capitalist friends, which increased the problem in the banking sector.
Not getting the loan increases the cost (not getting the loan to the worthy increases the cost)
According to the news, in an event organized by FICCI, the chamber of commerce and industry, he said, whenever the financial sector decides to give a loan to a particular person who is not loanable but more connected to you, its A simple means that capital is not being provided. When the capital does not go to more qualified borrowers, then one has to bear the cost of that opportunity. He said that it is the duty of the financial sector to ensure proper allocation of capital in the economy.
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Banks give more loan to infra sector (Banks give more loan to infra sector)
It is to be seen that the major reason for the problem of loans stuck in the banking sector was that banks gave more loans to the infra sector. Problems were arising in this area over many things. Advocating for the betterment of the banking sector, he said, I believe that it is very important now that the financial sector has taken the responsibility of giving loans on high quality standards. Especially in the case of infrastructure projects, he is taking care of it and is avoiding giving loans to close friends. I believe this is the only mantra for the betterment of the financial sector.
Suggestions for strengthening corporate governance also
Subramanian also suggested strengthening corporate governance to ensure good quality loans in the financial sector. Along with this, he also suggested to combine high quality loans with the encouragement of senior managers. Subramanian said that development financial institutions can play an important role in the field of infrastructural projects as such projects require special expertise.
Proposal to establish Development Finance Institute
The government has proposed to set up a Development Finance Institute to provide finance to projects in the infrastructure sector. This development finance institution can be named the National Infrastructure and Development Financing Bank. This bank will take the initiative to implement the pipeline designed for infrastructure projects. Under this national pipeline project, 7,000 projects have been identified, in which an investment of Rs 111 lakh crore is estimated by 2020–25.
2,000 out of 4,000 companies registered under insolvency process (2,000 out of 4,000 companies registered under insolvency process)
During the program, MS Sahu, chairman of the Insolvency and Debt Insolvency Board, said that of the 4,000 companies registered under the insolvency process, 2,000 have been completed. He said that instead of determining poorly trapped properties, more value is being gained from their solution. In the case of some companies, it has received up to 300 percent more than their fixed price.
