House panel to govt: Name all those who got Govt banks to write off debt

The committee, attached to the Ministry of Finance, held its second meeting on Wednesday which was attended by Finance Minister Arun Jaitley. Some members also suggested that a committee be constituted to finalise the recovery process in case of loans given to big corporate houses.

By: ENS Economic Bureau | Amitabh Sinha & D K Singhnew Delhi, New Delhi | Published: April 28, 2016 4:17:54 am
government banks, public sector banks, bad debts, rbi, supreme court, bank defaulters, bank loans india, 1.4 lakh crore bad debts, psb npa, govt bank write off, govt bank dab debt, govt bank debts, state bank of india, sbi npa, bank of india npa, banking news, rbi, reserve bank of india, india news, business news, economy news, latest news Banks wrote off a total of Rs 1.14 lakh crore of bad debts between financial years 2013 and 2015.

THE PARLIAMENTARY consultative committee on non-performing assets (NPAs) in the banking sector has suggested that the government should name all the defaulters whose loans have been written off by state-owned banks.

The committee, attached to the Ministry of Finance, held its second meeting on Wednesday which was attended by Finance Minister Arun Jaitley.

“Members (of the committee) suggested that there is need for bringing more transparency in the system, and list of all the defaulters whose loans have been written off by the PSBs be made public. They asked for exemplary action against the wilful defaulters so that others do not indulge in similar activities,” said a statement released by the Finance Ministry.

Some members also suggested that a committee be constituted to finalise the recovery process in case of loans given to big corporate houses.

“The Finance Minister said that wherever it was observed that… action taken by the banks against guarantors for recovery of defaulted loans is insufficient, the government has advised the banks to take action against guarantors in the event of default by borrowers,” it said. This direction was issued to the banks in March.

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Jaitley also told the committee that the Insolvency and Bankruptcy Code has been cleared by the joint parliamentary committee and is expected to be taken up for discussion in the ongoing session of Parliament.

He said the SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act) and DRT (Debt Recovery Tribunal) Act have been amended to make the recovery process more efficient and expedient.

On February 16, the Supreme Court took suo motu cognizance of The Indian Express report which said that Rs 1.14 lakh crore of bad debts had been written off by state-owned banks between financial years 2013 and 2015. Calling it “a big fraud”, a bench headed by Chief Justice T S Thakur ordered the RBI to share with it names of the biggest defaulters, who, the court said, lead “lavish lifestyle” despite not repaying the loans.

Jaitley told the committee today that the government has taken various steps to contain NPAs, especially in stressed sectors like steel, textiles, power and roads. He said transparency and professionalism would be given priority in the appointment process for top management positions in the PSBs including chairmen and managing directors. The government has given full autonomy to the banks to take commercial decisions, he said.

The committee members also suggested that there should be no employment cut due to any amalgamation or merger of banks. The government is planning to set up a panel to suggest a roadmap for consolidation among public sector banks.

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