Bank loan defaulters who divert funds will not be spared: Jaitley

Source: The Hitavada      Date: 04 Aug 2017 08:51:39


NEW DELHI,

Replying to a debate on the Bill, Jaitley said that a company defaulting on loans cannot claim the right of equality in treatment as regards repaying the loans. He said defaulting companies cannot ask why it was being targeted when some other defaulters were being let free

THE Lok Sabha on Thursday passed the Banking Regulation (Amendment) Bill, 2017, after Finance Minister Arun Jaitley declared that criminal and recovery proceedings will be started against defaulters of bank loans who divert money and asserted that no one can claim equality in not repaying loans to the banks.


Replying to a debate on the Bill, Jaitley said that a company defaulting on loans cannot claim the right of equality in treatment as regards repaying the loans. He said defaulting companies cannot ask why it was being targeted when some other defaulters were being let free.


“No, that cannot be an argument. The system has the capacity to take only a certain number of cases. I’m sure they will take up more case,” he said, referring to the 12 non-performing assets (NPAs) that have been identified for action by the National Company Law Tribunal (NCLT).
He said the Government would go after those who diverted funds got through loans and defaulted on payments.


“Many Non-Performing Asset (NPA) cases could be fraud, as money taken was diverted. These are not routine NPAs. Criminal proceedings will be carried out and bank will start recovery procedure for such accounts,” Jaitley said. After the Minister’s reply, the House passed the Bill, after rejecting a statutory resolution disapproving the Ordinance moved by a Congress member.


Under the Bill, the Central Government may authorise the Reserve Bank of India to issue directions to any banking company to initiate insolvency in respect of a default under the provision of the Insolvency and Bankruptcy Code.


It also has provisions empowering the Reserve Bank of India to issue directions to banks for resolution of stressed assets. “Many NPA cases could be fraud, as money taken was diverted. These are not routine NPAs. Criminal proceedings will be carried out and bank will start recovery procedure for such accounts,” Jaitley said.


The Minister said that the loans, which have turned NPAs, were probably given at a time when the economy was in a “boom” period and they seemed good investment proposals.