Saddled with huge non-performing assets, the banking sector on Thursday welcomed the Supreme Court verdict upholding constitutional validity of the Securitisation Act, but India Inc appears to be dissatisfied.

While bankers hailed the SC verdict saying it would bring in the much sought after discipline among corporate borrowers for timely repayment of loans taken from banks and FIs, industry bodies said the Act required fine-tuning to distinguish between wilful and 'unwilful' defaulters.

"It is a very positive development and will hasten the procedure of recovery, which, in turn, will help the bottomlines of banks," Indian Banks' Association chief executive H N Sinor told PTI in New Delhi.

Bankers expect about 20 per cent reduction in gross NPAs worth about Rs 20,000 crore (Rs 200 billion) this fiscal, thereby improving their profits significantly, as banks would be allowed to sell the assets attached from defaulter and use the recovered amount for productive purpose.

The verdict in Mardia Chemical case eliminates the ambiguity and now the lenders would have a right to take possession of and dispose of the assets of defaulting borrowers, a top ICICI official said.

However, the industry heaved some relief as the clause pertaining to deposit of 75 per cent of the defaulted amount as a pre-requisite to appeal, has been waived by the apex court.

The industry bodies -- FICCI, Assocham and PHDCCI -- welcomed the verdict to quash the Section 17(2) envisaging deposit of 75 per cent of loans while moving court but said it failed to address the needs of borrowers.