The Centre is working on finding ways to identify bankers in the public sector who are handling settlements of bad loans or non-performing assets. Finance Minister Arun Jaitley said the government is ready to provide more capital to public sector banks – in addition to the Rs 25,000 crore provided for in the 2016-17 Budget – to empower banks and protect bankers who take the initiative to settle bad loans, The Indian Express reported.

Bankers are usually reluctant to try and settle NPAs – loans for which people have failed to repay the interest or principal amount. They are wary of scrutiny by investigative agencies as the settlement of NPA accounts usually involves a significant discount. “…In situations like these, banks should be empowered and consequently should be protected so they can bring about commercially prudent settlements,” Jaitley said after a meeting with heads of public sector banks and financial institutions on Monday for their quarterly performance review.

Higher NPAs and increasing provisioning from their profits against bad assets left public sector banks with a net loss of Rs 18,000 crore, despite posting operational profits of more than Rs 1.4 lakh crore in the last fiscal, he said. Jaitley also highlighted the Bankruptcy Code passed by Parliament during the Budget Session last month, saying it will help banks recover loans faster after it becomes operational soon.

PSBs disclosed bad loans worth Rs 2.41 lakh crore for the last six months, a review by the Reserve Bank of India found. This is a 69% rise in NPAs over the last two quarters. In September 2015, the figure stood at Rs 349,113 crore, but at the end of March 2016, it was Rs 590,772 crore.