Minister of State (MoS) Finance, Anurag Thakur on Monday said that as per reports by the Life Insurance Corporation (LIC), the amount of its total Non Performing Assets (NPAs) was Rs 1,453.11 crore as on December 31, 2019.
Anurag Thakur was faced with a series of questions regarding the amount of NPAs that LIC currently has, the amount outstanding on various companies apart from the current NPAs, and the dates when the LIC had provided the said amount to the respective companies.
In a written reply in Lok Sabha to the above questions on the NPAs of LIC, MoS Finance stated, "As reported by Life Insurance Corporation of India (LIC), its net Non-Performing Assets (NPAs) stood at Rs. 1453.11 crore as on December 31 2019; out of which 196 companies consist of corporate debts and 52 are State Government Agencies as on December 31 2019.
The details of credit-related information can not be disclosed as financial institutions are required by law to maintain secrecy about the affairs of their constituents," the statement added.
When asked about the steps taken by the Government in dealing with the said NPAs of LIC, Anurag Thakur said that a Stressed Assets Cell has been set up in LIC to deal with NPAs.
"The Stressed Assets Cell reviews the debt assets to take prompt action on the basis of early warning signals, rating downgrade of company/instrument, account moving into Special Mention Accounts (SMA) category, voluntary disclosure by company, dissemination of information by other lenders, etc., or, if any, incipient stress is noticed in the sector," the statement by MoS Finance read.
The statement further said that the Stressed Assets Cell makes timely follow-ups with the borrowers for repayment and also evaluates the collateral securities.
In his written statement, Anurag Thakur also informed that 'extraneous' factors such as Industrial slowdown, lack of demand, judicial decisions, natural calamities, etc., turn debt accounts into NPAs.
He added that NPAs may be recovered by restructuring the account, refinancing of the account by other lenders, assignment of Debt, One Time Settlement (OTS) route, and other ways.
The MoS Finace further said, "Various legal options are adopted for the recovery of NPAs such as action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI), which allows banks and financial institutions to auction assets of defaulters to recover debt, filing the original application as per Debt Recovery Tribunal (Procedure) Rules, 1993, participating in Corporate Insolvency Resolution Process (CIRP) under Insolvency and Bankruptcy Code, 2016 through National Company Law Tribunal (NCLT) and filing application for winding up in NCLT, etc."
Anurag Thakur said as per RBI's circular dated July 7, 2019, LIC is part of the Inter Creditor Agreement (ICA) to resolve stressed assets in accordance with Banks and other Financial Institutions.
(With inputs from agencies)