Financial services secretary Rajiv Takru has asked banks to compulsorily file FIRs against willful defaulters while extending support to borrowers who have defaulted due to economic slowdown
GN Bureau | October 21, 2013
As bankers prepare for the review meeting with finance minister P Chidambaram on Tuesday, the finance ministry has suggested a two-way approach to check the mounting pile of bad loans. It has asked public sector banks (PSBs) to provide adequate support to companies which have defaulted on loan repayments due to the economic slowdown while going after those that are wiful defaulters.
According to a report in the Economic Times, financial services secretary Rajiv Takru has highlighted the urgent need to check the rising non-performing asset (NPA) figures. “Every bank in any particular lending consortium will have to file an FIR (first information report) against a borrower who is found to be a wilful defaulter. This is an act of criminality. However, lenders need to...support those borrowers who fail to repay loans due to industrial or sectoral issues. Banks are working on this,” Takru said.
Explaining the criminal aspect behind a wilful default, Takru said that a willful default occurs when a company ceases to repay loans because of fraud. Takru has also suggested that banks take over management control of companies whose loans have been approved for restructuring.
Till June, 549 cases of corporate loan defaults worth Rs 3.38 lakh crore had been referred to the corporate debt restructuring (CDR) cell. This marks a 49 percent jump from last year’s restructuring cases worth Rs 2.27 lakh crore.
This piece is based on a previous article by the authors published in Geoforum [Elsevier] in May 2019: available online: https://www.sciencedirect.com/science/article/pii/ S0016718519300764?via%3Dihub
The BJP’s oldest ally Shiv Sena is once again parting ways, putting their alliance behind and preparing to form government in Maharashtra with the support of the NCP and Congress. Nineteen days after the legislative assembly elections, despite a clear mandate for the BJP and Sena, Maha
A resolution to the long-pending dispute which has to an extent shaped the recent history of India was in sight as the supreme court on Saturday paved the way for the construction of a temple at the disputed site where the Babri Mosque stood for long but is held to be Lord Ram`s birth place. A five
The global rating agency Moody’s Investors Service has changed its outlook on India’s ratings from ‘stable’ to ‘negative’, but the finance ministry maintained that “the fundamentals of the economy remain quite robust”. On Thursday, Moody’
The real estate sector is arguably the most representative of the slowdown in the economy. The government has moved to offer it a helping hand with a Rs 10,000 crore package, which has the potential of lifting the sagging fortunes of a large number of allied industries. The union cabinet on