Millennium Post

Disclose names of defaulters now

Why aren’t the big corporate firms that have enormous public debts under the scrutiny of the Comptroller and Auditor General (CAG) of India? Evidently, with the surfacing of one of the biggest scams in the history of the banking sector, such a move by the government would do much to partially salvage the situation. Particularly so when an amount as staggering as Rs 1 lakh crore has been written off as bad debt, with the public sector banks seeing no hope of recovering those enormous corporate debts. While the finance minister is considering fresh licences for new players in the banking sector, what really needs to be done is to bring it under tighter regulation. As the Reserve Bank of India has aired publicly, it is now for the government and the regulatory body to bring in greater control, with tighter, more transparent credit appraisal systems in place in order to ensure minimum bad lending. With the RBI clearly stating that the banks have failed to implement efficient and speedy measures for recovering stressed assets, there is really no reason for the government to shield these defaulters citing banking secrecy laws. Especially, when these private corporations have siphoned off humongous amount of money from the public sector banks as non-recoverable debts, increasing the non-performing assets of the banks and reducing the profits.

Reports have been pouring in from the beginning of this year how bad loans had been steadily rising in the banking sector, saying that PSBs were forced to write off Rs 70,000 crore bad loans in four years (2009-11), therefore pointing towards a wasteful expenditure on the part of the government exchequer at a time when fiscal crunch had been bogging the economy down. Obviously, as senior RBI officers have already underlined, faulty credit restructuring policies and inefficient credit appraisals have shot up the ratio of slippages to recovery and upgradation, yet the PSBs have been continuing with their misguided policy of lending to these willful and chronic defaulters. It therefore begs the question why the centre, as well as the principal opposition, have maintained a studied silence on this pressing issue. Obviously, the answer is simple. Most of these fraudulent private corporations have been acting as funding resources for the political parties throughout the spectrum. Hence, even though the shrillness of the political discourse in the poll-bound India has reached an all-time high, voicing the concerns on where the money is going is likely to harm all and sundry in the corporate-political-bureaucratic nexus. Since most of these defaulting corporations have their stooges in key positions in both nationalised banks and regulatory bodies, their nefarious activities and looting the public exchequer are being systematically brushed under the carpet. Lastly, the fact that mainstream media has been all too reluctant to highlight the issue, is a clear sign that even the fourth estate is not exempt from the unethical collusion.
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