New Delhi: Union finance ministry on Tuesday said that the state-run banks are aiming to recover about Rs 1.80 lakh crore from bad loans in the current fiscal as compared to Rs 74,562 crore in the previous fiscal.

Speaking to media  after meeting with the PSU bank heads, finance minister Arun Jaitley said that the bad loans are declining as recoveries have picked up and lenders are confident of maintaining liquidity as required.  “We have overcome what was traditionally described as legacy issues, and faster we get out of it, I think it is better as far as the economy is concerned,” he said.

Mr Jaitley said the impact of various initiative was visible as after several quarter banks made net profit. He said that the lending ability of PSU banks are much better and their credit growth will move up significantly. He said that with the GDP growing and  consumption up, banking activity is bound to pick up.

Mr Jaitley said that banks must strive to be seen always as institutions of clean and prudent lending.

On Raghuram Rajan’s letter to standing committee that the next banking crisis would be triggered by MSME lending, Mr Jaitley said: “I think for anyone to do post-mortem is easier than action when it was required.”

Finance ministry said that close to Rs 18,500 crore worth of non-core assets will be sold by PSBs this fiscals to raise funds.

The ministry added that there will be complete rationalisation of foreign operations of PSBs by March 2019, with closure/consolidation of 57 branches and offices.

The ministry launched  a web portal that will enable in-principle approval for MSME loans up to `1 crore within an hour from SIDBI and five PSBs.

The ministry said that subsequent to this, the loan will be disbursed in 7-8 working days. The loans are undertaken without human intervention till sanction and or disbursement stage.

“MSME borrower is not required to submit any physical document for in-principle approval. The solution uses sophisticated algorithms to read and analyse data points from various sources such as IT returns, GST data, bank statements, MCA21 in less than an hour while capturing the applicants basic details using smart analytics,” said the ministry.