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Rohan Chauhan

Updated on May 11, 2026•others

Project Sashakt Explained How Banks Handle NPAs

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3 Answers
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Prreeti Radhika Taneja
Updated on Dec 22, 2025

According to a report on Quartz, 14 of 21 state-run banks in India has suffered a total loss of Rs 42,043 crore. (Source) And the gross NPA of public sector banks stood at Rs 7.77 lakh crore by the end of December 2017. (Source)

Keeping this situation in mind and few other problems, the introduction of Project Sashakt is a much welcome move. Basically, a committee of bankers, led by the Chairman of Punjab National Bank Sunil Mehta, submitted a report on ways to deal with Non-Performing Assets. Interim Finance Minister Piyush Goyal, on Monday, announced that the government has accepted and approved this report. And they would be moving ahead to implement the actions mapped in the report.

According to Project Sashakt led by Sunil Mehta Committee, an independent Asset Management Company (AMC) would be formed that would function under a five-pronged strategy to primarily deal with NPA cases of more than Rs 500 crore. Although, it would also deal with loans from Rs 50 crore, and Rs 50-500 crore.
 
 
The report outlines many solutions to address the challenges of stressed accounts, including dealing with them through the inter-creditor arrangement.
 
It also recommends ways to attract foreign capital through effective frameworks. Additionally, there are also commendations for the formation of asset trading platform for both performing and non-performing assets.
 
 
In short, the five-pronged strategy includes:
 
 
· SME resolution approach
 
 
· Bank-led resolution approach
 
 
· AMC led resolution approach
 
 
· NCLT/IBC approach
 
 
· Asset-trading platform
 
 
Admittedly, Project Sashakt, led by Sunil Mehta Committee is the right move to tame a critical problem in the banking sector. However, how effective would it be is yet to be seen. After all, we’re a country good at planning but bad in implementation.
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Gaatha Anand
Answered on May 9, 2022

A group led by PNB chairman Sunil Mehta suggested Project Sashakt to assist consolidate stressed assets. Up to 50 crore in bad loans would be managed at the bank level, with a 90-day deadline. In recent years, the Indian banking system has seen a sharp rise in non-performing assets. This is largely attributed to the slowdown in economic growth, reduction in policy rates and government measures undertaken to tackle rising bad loans. Amongst other measures, banks have been asked by the Centre to identify stressed assets and provide for adequate provisioning during their financial year 2016-17 financial accounts. The Reserve Bank of India also mandated that at least 40% of total restructured loans should be made IRDA (Insurance Regulatory Development Authority) compliant by mandating coverage for these products from life insurers.

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Neha Mehta
Social Psychology Explorer
Updated on May 11, 2026

Project Sashakt was introduced to help banks deal with NPAs (Non-Performing Assets) more effectively. In simple words, NPAs are loans where borrowers stop repaying the money on time, which creates financial pressure on banks. Project Sashakt was designed to improve the process of identifying, managing, and resolving these bad loans faster. It also helps banks recover money through better coordination, asset management, and legal recovery systems.

In my opinion, this project was important because rising NPAs were affecting the banking sector and slowing economic growth. Proper handling of NPAs helps banks become financially stronger and improves trust in the banking system.

And if you want to know “What is the importance of using salt in baking?”, then you should definitely explore this question too because it explains how salt improves flavor, texture, and the overall baking process in food 😊

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