Arun Jaitley will hold a crucial pre-budget interaction with Bankers on Friday

The Union Finance Minster Arun Jaitley will Friday hold a crucial pre-budget interaction In the capital with chief executives of banks, financial institutions and non-banking finance companies.

This meeting assumes significance as it comes in the backdrop of banking system faced with huge stressed loan portfolio of over Rs 10 lakh crore and the government having put in place an insolvency resolution framework for companies.

Already 12 companies — accounting for 25 percent of stressed assets in the banking system — has been referred by banks (on the advice of RBI) to the National Company Tribunal (NCLT). Another 22 out of the second list of 28 cases have been reportedly referred to the NCLT for initiation of rrsolution process provided under the Insolvency and Bankruptcy Code(IBC),

Besides the raging NPA issue, sources said that the Friday meeting may also discuss the way forward for the controversial Financial Resolution and Deposit Insurance (FRDI) Bill, which provides the resolution framework for ailing financial firms including banks, insurance companies and stock exchanges.

Already there is widespread opposition , especially by bank unions, to this Bill across the country as it could compromise depositors’ interests in case of a ‘Bail-in’ situation in banks. The Finance Ministry however is of the view that the FRDI Bill will only enhance protection for the depositors’ interests in banks.

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