New Delhi, November 28, 2017

Says cases of recovery from 12 big defaulters underway

Finance Minister Arun Jaitley on Tuesday came out in defence of the Ordinance for the Insolvency and Bankruptcy Code and said it aims to put in place a clean and effective system through which wilful defaulters of bank loans may be kept away from the management of their business and time-bound recovery effected from them.

“While honest businesspersons will be able to access loans from strong and reformed banks, strict and clear laws and the all-round clean-up initiated by the Government would result in a clean system in the country,” the Minister wrote in a blog post titled “The Fiction of Loan Waiver to Capitalists”.

Responding to “rumours being propagated on waiver of loans of capitalists by banks, Jaitley said that, “Time has come for the nation to be apprised of facts in this regard.”

The Ordinance bars wilful defaulters and unscrupulous entities from bidding for stressed assets. It was approved by President Ram Nath Kovind on November 23, a day after being cleared by the Union Cabinet.

Jaitley stressed that the government has not waived any loans of big NPA defaulters. Instead under the new Insolvency and Bankruptcy Code, cases have been instituted in the National Company Law Tribunal (NCLT) for time-bound recovery from 12 largest defaulters in six to nine months, in NPA cases of Rs. 1,75,000 crore.

“Cases for the recovery of NPA dues from the assets of these big defaulters are under way at various stages,” he said.

Taking a dig at the previous UPA government, he said that between 2008 and 2014, public sector banks disbursed disproportionate sums of loans to several industries. “The public needs to ask the rumour mongers at whose behest or under whose pressure were such loans disbursed,” he said.

Later, rather than taking action against wilful defaulters, Jaitley said the then government, through relaxation by banks in loan classification kept these defaulters as non-NPA accountholders.

[The Hindu Business Line]