There is indeed a provision to adopt the writing of procedure to put it in a sinking debt when there is no repayment of debt for a long time, but there has been no change in the situation even though Narendra Modi becoming prime minister after the law of lending and recovery has been enacted.
Amidst the corona pandemic, the Reserve Bank has written off a debt of Rs. 68,607 crore of 50 defaulters. These include Vijay Mallya, Nirav Modi, and Mehul vigilantism. Instead of serious thinking, there is a war between Rahul Gandhi, Prakash Javadekar, and Finance Minister Sitharaman.
The matter has also been disclosed by the RTI Act rather than the awareness of the opposition. This shows that the main opposition party, like the Congress, on the information being obtained by the social workers, is playing a game of politics, and the ruling is cleaning up that writing does not mean waiving the debt. For a few years, public and private sector banks have been reeling under severe economic crisis due to scams and wilful defaulters not paying loans. Consequently, the number of cases involving NPAs and wilful depository in banks has been increasing steadily. It started in 1999. At present, the Central Vigilance Commission had given instructions to rbi to collect information about the irregularities of Rs. 25 lakhs or more. But these instructions were put in the cold storage by the Reserve Bank. Consequently, borrowers who have the ability to repay the loan did not repay the loan. On the contrary, like Vijay Mallya, Nirav Modi, and Mehul vigilantism, many defaulters migrated from the country with large capital.
All are familiar with the fact that the earnings of the bank and the moneylender are from the interest on the money given. If the lender stops paying both interest and principal installment, the bank’s business targets will not be fulfilled? The situation is so bad that 40 banks have come to a cash account of Rs. 6, 83479 crores. The number of such companies is about 1100, which is not paying the installment. The rules of the Reserve Bank are that if a borrower does not pay the installments for three months, he should be put in the category of guilty. But the NPAs are not getting dandy hair. The capital deposited in the country’s banks is about 80 lakh crore. Seventy-five percent of the money is of small savers and the general public, but, unfortunately, this amount has gone to the big industrial houses, and they are not only claiming it, but they are blowing the bouquet. While farmers and educated unemployed are committing suicides, it is a wind made that industrial houses easily get thousands of crores of loans, while small borrowers have to make many rounds of banks.
The nationwide lockdown has enforced the economic crisis.
The anomaly is that industries get loans at a lower rate of interest, while the farmer is given loans at an 18 percent interest rate on tractors. Because of these constraints, it is difficult for new entrepreneurs and innovators to start their businesses? It is also difficult to borrow for the house. That is why the Aam Aadmi is falling into the Chagall of the Moneylenders moneylenders. Due to such difficulties, the business of microfinance has flourished all over the country. They lend to the poor and middle-class people at a high annual interest rate of 30 percent. This reality shows that the banking sector has failed to support the weaker sections. On the contrary, the same banks have become a source of salvage of the companies that are drowning due to increasing the amenities of the rich class, opening financial sources of the industrial sector, and mismanagement. The problem of NPAs also needs to be seen at the policy level. It takes a long time to declare a company in India as bankrupt and complete the process of auctioning its property.
This fact has also come to the fore in the case of Kingfisher. As a result of relaxation in rules, 60 thousand cases relating to declaring bankruptcy and attachment of property in the courts of the country are under consideration.
Therefore, these rules need to be streamlined as cheque bounce related matters. In view of this, the bank also needs to fix the limit for lending to the same company and company group. At present, a bank can lend only one company to 25 percent of its total capital and up to 55 percent to one company group. It empowers the bank officials to sanction loans generously. In banks, there is also a similar sag. Legal measures are also required to ensure the accountability of the bank manager and punitive action against the defaulter who does not repay the loan. subscribe chauhansameer.com to get regular updates of the latest opinions.