Congress misleading the nation on loan write-offs: FM Nirmala Sitharaman

The RBI said that Indian banks have written off Rs 68,607 crore of debt of top 50 willful defaulters till September 30, 2019
Stung by the Opposition’s attack on the Reserve Bank of India admitting that banks had written off Rs 68,607 crore of debt of top 50 willful defaulters till September 30, 2019, Finance Minister Nirmala Sitharaman said that the Modi government was cleaning up the financial system, going after wilful defaulters, and accused the Congress of ‘sensationalising’ and being ‘brazen’ in misleading people on the subject.

“Congress and Rahul Gandhi should introspect why they fail to play a constructive role in cleaning up the system. Neither while in power, nor while in the opposition has the Congress shown any commitment or inclination to stop corruption and cronyism,” Sitharaman tweeted late on Tuesday night.

“Rahul Gandhi and Randeep Surjewala (Congress spokesperson) have attempted to mislead people in a brazen manner. Today’s attempt of Congress leaders is to mislead on wilful defaulters, bad loans & write-offs,” Sitharaman said.

The RBI said that Indian banks have written off Rs 68,607 crore of debt of top 50 willful defaulters till September 30, 2019, in response to a petition filed under the Right to Information (RTI) Act. The write-offs are technical or prudential in nature, which means the banks have made 100 per cent provisions against the loans. However, this doesn’t mean the banks have given up the right to recover the loans. It also doesn’t mean that banks have written off the entire loan, as some loans have been taken against security, which either can be or already has been recovered.

The RTI was filed by Saket Gokhale, an activist, on March 19, and he received the list on April 24. It lists defaulters till September 30 last year, which means either the RBI did not update the list, or further willful defaults above Rs 5 crore did not happen in this period to update.

“Provisions are made for NPAs as per the four-year provisioning cycle laid down by the RBI. Upon full provisioning being done banks write-off the fully provided NPA but continue to pursue recovery against the borrower. No loan is waived off. Those defaulters who do not repay despite having capacity to pay, divert or siphon-off funds, or dispose of secured assets without bank’s permission are categorised as wilful defaulters,” Sitharaman said.

Calling such wilful defaulters well-connected promoters, who benefitted from UPA’s ‘Phone banking’, Sitharaman said that during the second term of the UPA government, banks had written off Rs 1.45 trillion.

“It is the Narendra Modi government which is pursuing these wilful defaulters. 9,967 recovery suits, 3,515 FIRs, invoking Fugitive Amendment Act in cases are on now. Total value of attachment & seizures in the cases of Nirav Modi, Mehul Choksi and Vijay Mallya us Rs 18332.7 crore,” the finance minister tweeted.

According to the the RBI’s response to the RTI, Mehul Choksi’s Gitanjali Gems tops the list with Rs 5,492 crore written off. The much publicised Kingfisher Airlines is in the top-10 list with a write-off of Rs 1,943 crore. Gitanjali is followed by REI Agro, with an exposure of Rs 4,314 crore, and Winsome Diamonds and Jewellery at Rs 4,076 crore.

Earlier in the day Surjewala had released the list of the defaulters. Rahul Gandhi said he had asked the government in Parliament the names of the top 50 bank loan defaulters, but the finance minister did not answer his question. Now, the RBI has given out the list which includes Nirav Modi, Mehul Choksi and many of BJP's "friends", he said.

"I asked a straight question in Parliament - state the names of the 50 top bank loan defaulters in the country. The finance minister refused to answer the question. Now the RBI has given the names of Nirav Modi, Mehul Choksi and many of BJP's 'friends' in the list of bank frauds. That is why this truth was held back from Parliament," Gandhi said in a tweet in Hindi.

However, Sitharaman said that the government had provided a written reply to Gandhi’s question in Parliament.

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