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Thursday, June 04, 2020

RBI’s RTI response: Finance Minister hits back at Congress over list of wilful defaulters

In a series of 13 tweets, the FM suggested that the willful defaults originated in UPA’s tenure and that Gandhi and Surjewala have “attempted to mislead people in a brazen manner”.

By: ENS Economic Bureau | New Delhi | Published: April 29, 2020 1:57:35 am
Nirmala sitharaman, Nirmala sitharaman on Nirav Modi, Mehul Choksi, Vijay Mallya, Nirmala sitharaman on loan waiver, Nirmala sitharaman on loan defaulters, Rahul Gandhi, Congress, Indian Express Finance Minister Nirmala Sitharaman. (File Photo)

Hours after Congress spokesperson on Monday Randeep Surjewala released the list of wilful defaulters, while sharing the RBI response — that showed that banks “technically” wrote-off Rs 68,607 crore in outstanding loans of top 50 wilful defaulters, including of firms belonging to fugitive economic offenders Mehul Choksi and Vijay Mallya, till September 30, 2019 — to an RTI query filed by activist Saket Gokhale, Finance Minister Nirmala Sitharaman hit back at former Congress president Rahul Gandhi and Surjewala.

In a series of 13 tweets, the FM suggested that the willful defaults originated in UPA’s tenure and that Gandhi and Surjewala have “attempted to mislead people in a brazen manner”. She added that “neither while in power, nor while in the opposition has the @INCIndia shown any commitment or inclination to stop corruption & cronyism.”

While asking the Congress party and Rahul Gandhi to introspect why they fail to play a constructive role in cleaning up the system or show any commitment or inclination to stop corruption and cronyism, she credited the NDA government for pursuing the wilful defaulters. “It is @PMO @narendramodi government which is pursuing these wilful defaulters.9967 recovery suits, 3515 FIRs, invoking Fugitive Amendment Act in cases are on now. Total value of attachment & seizures in the cases of Nirav Modi, Mehul Choksi and Vijay Mallya : Rs 18332.7 Crore.”

Stating that scheduled commercial banks had written-off Rs 1,45,226 crore between 2009-10 & 2013-14, she pointed that provisions are made for NPAs as per the four-year provisioning cycle laid down by the RBI. “Upon full provisioning being done banks write-off the fully provided NPA but continue to pursue recovery against the borrower. No loan is waived off,” Sitharaman added.

Hitting out at then UPA government, she said that defaulters who do not repay despite having capacity to pay, divert or siphon off funds, or dispose of secured assets without bank’s permission are categorised as wilful defaulters. “They are those well connected promoters who benefitted from UPA’s ‘Phone banking’.”

The FM also cited former Reserve Bank governor Raghuram Rajan as saying, “A large number of bad loans originated in the period 2006-2008 … Too many loans were made to well-connected promoters who have a history of defaulting on their loans … Public sector bankers continued financing promoters even while private sector banks were getting out. RBI could have raised more flags about the quality of lending.” She added that in 2015, the Centre asked PSBs to check all NPAs above Rs 50 crore for wilful default.

Earlier in the day, Gandhi alleged that the NDA government had hidden the names of top 50 wilful bank loan defaulters from Parliament because it included the names of some of the friends of the BJP. On Twitter, he said that on March 16 he had asked the FM in the Lok Sabha for the list but “the finance minister refused to answer. And now the RBI has given the list which includes the names of BJP’s friends including that of Nirav Modi and Mehul Choksi. That is why the truth was hidden in Parliament.”

Gandhi’s attack came after the Congress, referring to the RTI reply attacked the Centre. Addressing a press conference, Surjewala — Congress’ communication department head — alleged that the central bank, through the RTI reply, has disclosed that the Narendra Modi government had waived off Rs 68,607 crore due from 50 defaulters, including absconding jeweller Nirav Modi and his partner Mehul Choksi.

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