End vilification of India Inc: ASSOCHAM

Even bankers including, the RBI, realise that there is a vilification campaign against lenders and the industries, the industry body said

GN Bureau | May 9, 2016


#RBI   #downturn   #bank loans   #ASSOCHAM  


 The associated chamber of commerce of India [ASSOCHAM] has asked the Narendra Modi government to change the definition of NPAs [non-performing assets] – from the present 90 days limit to service bank loans – to enable India Inc. to withstand the global downturn, which is being linked to the banks NPAs.

It asked the government to increase the 90 day limit, which, it felt, was too short in the scenario where the industry is passing through a rough patch.
 
The apex body of Indian businesses and industries said that currently a vilification campaign against India Inc was going on in which it was being painted mostly as willful defaulters of the banks, while the industry was grappling with a huge burden caused by a severe “global downturn, poor governance and various judicial pronouncements around the highly leveraged sectors like steel, energy and infrastructure”.
 
The managing committee of the ASSOCHAM recently discussed the public discourse about the NPAs at the end of which, it expressed concern that opinion makers were creating a poor impression of the industries and an environment in which people would not be able to speak pragmatically on the real issue behind the NPAs of the banks.
 
 “Even bankers including the RBI realise that there is a vilification campaign against lenders and the industries, but the public discourse and narrative has been so much swayed in uni-direction that anyone speaking in a pragmatic and truthful way could be targeted as being friend of people perceived to be swindlers, but for all you know they may be struggling to keep their units operational against all odds,” an ASSOCHAM handout said.
 
It said that even the RBI had told the parliament that the large part of the NPAs are a result of the economic downturn.
 
ASSOCHAM said a majority of businesses have the intention to repay bank loans. However, it expects the opinion makers to appreciate the fact that while the global situation particularly in Europe was grim, the Indian industry had been managing even in sectors like steel. “It’s important to protect job losses,” it said.
 
It asked the “media, judiciary and opinion leaders” for a pragmatic approach on NPAs. “Let us not kill our projects and industries, where there is scope for revival.”
 
“The lenders should be more pragmatic and flexible in arriving at settlements for, what is being offered today may not even be available tomorrow if the unit if dead.”
 
It asked the government and the industry to join hands in changing the narrative to “timely hair cut, restricting, conversion into equity or simply put, taking some losses in the larger interests of the economy, mainly protection of jobs, should be something to be encouraged and not to be apologetic about.
 

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