The key priority of the newly set up Banks Board Bureau (BBB) will be to restart lending by state-run lenders, said Chairman Vinod Rai on Wednesday.

“We will work to restore the confidence of banks to lend. The first priority is to kick start lending by public sector banks, without the fear of bureaucratic overhang,” said Rai, who met Jayant Sinha, Minister of State for Finance. Stressed assets, along with slow economic activity, have made banks cautious in lending.

Gross non-performing assets of PSBs rose to ₹3.6-lakh crore by December end, from ₹2.67-lakh crore at the end of March 2015.

Capital consoloidation

While the BBB will also work on consolidation and capital infusion in banks, Rai declined to give a timeline for the consolidation.

“The work on consolidation will be taken up along with the restart of lending activities,” he said. The next meeting of the Bureau will take place on April 22. The BBB, which started working on April 1 this year, held its first meeting on April 8 in Mumbai.

Major priorities

At the time, Sinha had said that recapitalisation and consolidation of public sector banks, stressed assets, current vacancies and providing government support for improving their competitiveness were some of the issues that were discussed.

Announced as part of the Centre’s Indradhanush plan for banking sector reforms, the BBB is tasked with recommending top level appointments of directors and non-executive Chairman at PSBs and suggesting ways of raising funds and addressing the problem of stressed assets of these lenders.

ICICI Bank’s former Joint Managing Director HN Sinor, Bank of Baroda’s former CMD Anil K Khandelwal, and rating agency CRISIL’s former chief Rupa Kudwa, are its members.

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