Govt, bankers to crack down on wilful loan defaulters-Business Line 31st August 2013
Banks told to cut down gross non-performing assets: Takru
MUMBAI, AUG. 30:
The Government and the bankers have unanimously resolved to go after wilful defaulters of bank loans, assured Rajiv Takru, Secretary – Department of Financial Services.
“I think there is a fair bit of unanimity on Corporate Debt Restructuring. Banks have been advised that they have to cut down their gross non-performing assets and therefore the wilful defaulters must be dealt with as firmly, as correctly and as expeditiously as possible,” Takru said on Friday, after a meeting with top bankers of some public sector banks. Corporate Debt Restructuring (CDR) is a mechanism where banks restructure loans of borrowers on easier terms such as by reducing lending rates and giving the borrowers longer time to repay their dues.
However, it was found that many companies had resorted to the CDR mechanism just to delay payments.
Takru said that in a Parliamentary Consultative Committee meeting yesterday, in the capital, all the members agreed that those cases where restructuring happens because of factors beyond the control of companies must be given due consideration while wilful defaulters must be dealt with severely.
On the measures that banks are taking to get tough with wilful defaulters, State Bank of India Chairman, Pratip Chaudhuri, said, “We are registering them as wilful defaulters…We are going after their personal assets. We are taking action under SARFAESI. We are seeking winding up of their companies.”
He, however, refused to give information on how many such wilful defaulters State Bank of India was going after.
“I do not keep a count,” he said.
Following the general weakness in the economy, there has been a massive spurt in restructured assets since the middle of last fiscal, resulting in the total quantum of CDR assets touching nearly Rs 2 lakh crore.
http://www.thehindubusinessline.com/industry-and-economy/banking/govt-bankers-to-crack-down-on-wilful-loan-defaulters/article5076076.ece
FinMin warns wilful defaulter again; asks banks to nail them
MUMBAI: Reiterating its stance on wilful defaulters, the Finance Ministry today asked banks to take stern action against such companies.
"There was a complete unanimity on how wilful defaulters are going to be treated. At today's meeting, I have also communicated that message which I think is very important that absolutely no consideration will be shown to wilful defaulters," Financial Services Secretary Rajiv Takru told reporters after a meeting with top bankers here this evening.
He said banks have been advised to cut down their net non- performing assets (NPAs) and so wilful defaulters must be dealt as firmly, correctly and expeditiously as possible.
Takru had earlier this month gave a stern warning to wilful defaulters and told them that they should be prepared to cede management control of their companies as they are putting public's money at stake.
As of June quarter, total restructured assets of banks crossed Rs 4 lakh crore, and the major contributor are the state-run banks.
In FY'13, banks restructured Rs 75,000 crore loans under the corporate debt restructuring (CDR) mechanism, which was nearly double the level in the previous fiscal.
At the meeting with IBA here today, Takru discussed issues related to CDR, NPAs, direct benefit transfer (DBT), financial inclusion, opening up of new branches and the follow-up of agriculture debt waiver with banks.
Takru said at the yesterday's parliamentary consultative committee meeting on 'NPAs in public sector banks', the members and Finance Minister P Chidambaram had agreed on doing a lot of hand-holding in cases of genuine distress which is caused by the environmentor the factors beyond their control.
On public sector banks' capital infusion plan, Takru said: "We have got our plan of action ready and a decision will be taken soon. We have the whole matrix worked out...various alternatives like QIPs (are being discussed and will be implemented on time)."
Earlier this month Chidambaram had said the government would be infusing Rs 14,000 crore into the state-run banks, as promised in the budget, next month.
Talking about the rupee, Takru said: "The recent rupee fall is not reflective of any weakness in the economy. This is not the value of the rupee, it is undervalued at the moment."
He, however, expressed confidence that the rupee, which has fallen over 21 per cent since April this year will regain its normal value soon
"There was a complete unanimity on how wilful defaulters are going to be treated. At today's meeting, I have also communicated that message which I think is very important that absolutely no consideration will be shown to wilful defaulters," Financial Services Secretary Rajiv Takru told reporters after a meeting with top bankers here this evening.
He said banks have been advised to cut down their net non- performing assets (NPAs) and so wilful defaulters must be dealt as firmly, correctly and expeditiously as possible.
Takru had earlier this month gave a stern warning to wilful defaulters and told them that they should be prepared to cede management control of their companies as they are putting public's money at stake.
As of June quarter, total restructured assets of banks crossed Rs 4 lakh crore, and the major contributor are the state-run banks.
In FY'13, banks restructured Rs 75,000 crore loans under the corporate debt restructuring (CDR) mechanism, which was nearly double the level in the previous fiscal.
At the meeting with IBA here today, Takru discussed issues related to CDR, NPAs, direct benefit transfer (DBT), financial inclusion, opening up of new branches and the follow-up of agriculture debt waiver with banks.
Takru said at the yesterday's parliamentary consultative committee meeting on 'NPAs in public sector banks', the members and Finance Minister P Chidambaram had agreed on doing a lot of hand-holding in cases of genuine distress which is caused by the environmentor the factors beyond their control.
On public sector banks' capital infusion plan, Takru said: "We have got our plan of action ready and a decision will be taken soon. We have the whole matrix worked out...various alternatives like QIPs (are being discussed and will be implemented on time)."
Earlier this month Chidambaram had said the government would be infusing Rs 14,000 crore into the state-run banks, as promised in the budget, next month.
Talking about the rupee, Takru said: "The recent rupee fall is not reflective of any weakness in the economy. This is not the value of the rupee, it is undervalued at the moment."
He, however, expressed confidence that the rupee, which has fallen over 21 per cent since April this year will regain its normal value soon
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