Loan write-off: Congress and CPM allege cronyism, loothttps://indianexpress.com/article/india/loan-write-off-congress-and-cpm-allege-cronyism-loot-5674415/

Loan write-off: Congress and CPM allege cronyism, loot

The CPI(M) also called it “cronyism of the highest order”. Party general secretary Sitaram Yechury said neither the banking sector nor the Reserve Bank of India has disclosed identity of borrowers whose loans were written off by banks.

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“These are not technical write-offs, and not more than 15-20 per cent is recovered of the written-off amounts. Moreover, the write-off figures every year are rising, much faster than recoveries and recapitalisation of banks,” Sitaram Yechury said.

Alleging that the Narendra Modi government rests on the twin-pillars of “cronyism and loot”, the Congress on Saturday asked the Centre to reveal names of corporate leaders whose loans have been written off in the last five years.

The party alleged that the Modi government has shown “one-sided favouritism” for its “blue-eyed corporates.”

The Congress was reacting to a report in The Indian Express on Saturday that banks have written off loans to tune of Rs 7 lakh crore in the last 10 years, of which Rs 5,55,603 crore -– or about 80 per cent — were written off in the last five years.

The CPI(M) also called it “cronyism of the highest order”. Party general secretary Sitaram Yechury said neither the banking sector nor the Reserve Bank of India has disclosed identity of borrowers whose loans were written off by banks. He said bank unions have consistently demanded that the government make public names of defaulters.

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Congress spokesperson Abhishek Singhvi said, “This is the worst example of crony capitalism…. If you allow Rs 5.5 lakh crore to be written off, all incentive, all urge, all drive to recover a loan written off vanishes. The excuse given frequently is that the written-off loan is still recoverable because the writing off of a loan in the books does not mean that the loan is waived. But that is a very illusory, technical argument.”

“The reality is that when a bank writes off a loan…the incentive to recover becomes virtually nil….And this is because the Modi government rests of the twin pillars of cronyism and loot.

The Congress asked the Government “to reveal the names of corporates in respect of whom [Rs] 5.5 lakh crore loans have been written off.”

Singhvi also said: “Now please don’t throw some rulebook or guideline at us. You are entitled to reveal the names at least, because your books have written it off. (But) I can tell you there is no chance of the names being revealed because that will reveal the true extent of Modi government’s crony capitalism. It is a very serious matter.”

The Congress leader said banks have written off Rs 1,08,374 crore in 2016-17, and Rs 1,61,328 crore in 2017-18. In the first six months of 2018-19, Rs 82,799 crore was written off. “So on average, banks have merrily written off Rs 1 lakh crore loans every year. The right hand will write off loans, left hand will recapitalise. It is a joke, a fraud…” he said.

Yechury said, “Modi and his minions claim there is no money to help farmers, workers and the poor. But there is enough money to write off [Rs] 5.55 lakh crore loans of rich cronies. This is the real face of BJP-RSS and Modi government.”

“These are not technical write-offs, and not more than 15-20 per cent is recovered of the written-off amounts. Moreover, the write-off figures every year are rising, much faster than recoveries and recapitalisation of banks,” Yechury added.