BJP, Cong spar over Mallya
Fugitive businessman Vijay Mallya is once again at the centre of a raging controversy. This time, the Congress has charged Union Minister Arun Jaitley of holding a meeting with Mallya only a day before the latter fled the country. The party has also accused the Finance Minister of being party to the conspiracy that led to Mallya's escape. It has also come to light that a lookout notice put out by the CBI against Mallya was diluted only a month before he escaped, suggesting that the government had provided a safe passage to the absconding billionaire. BJP has hit back at the Congress, stating that it was under the regime of UPA-II that Mallya-owned Kingfisher Airlines was given loans by bending the rules. Mallya, who is facing extradition trial in the UK, had taken loans from a range of public sector banks for his airline business but he did not repay the loans as Kingfisher Airlines ran into severe losses. In his latest statement that he had met Arun Jaitley before leaving India, he has mentioned about talking to the Finance Minister on how he wanted to settle the loans with different banks. The Finance Minister reportedly told him that he should make these offers to the banks concerned and not to him. There is a major difference between the loan figures that the banks are putting out and the figure that Mallya gives. As per the banks, Mallya owes Rs 9,000 crore, which includes the interest on the principal amount taken. According to Mallya, the actual amount is less than half of this figure and, for that amount, he has proposed a settlement to the banks. At the moment, Mallya is in London and Indian agencies are trying to bring him back to the country to face the law in a multi-billion dollar banking scam. The matter of his extradition is being heard by a UK court and the hearing is in its final stages. It is likely that the court will give its verdict on allowing Mallya to be extradited to India shortly. If he is extradited, he will be put up at the Arthur Road jail in Pune, as per an assurance given by the Indian authorities to the UK court that the facilities here would be better than other jails. One of the arguments that Mallya had put forth about why he does not want to be tried in India was the pitiable condition of Indian jails where he might be housed during the trial period. Not ready to make any compromise on the rights of the prisoners, the UK court then asked Indian authorities to provide a video of the jail where Mallya would be lodged.
The staggering pile of non-performing assets (NPAs) or bad loans is a serious issue that the Indian banking industry is encountering. Though a definite figure is not available, it is believed that the cumulative NPA of the Indian banking industry is in the range of Rs 6.50 lakh crore to Rs 18 lakh crore. This staggering level of NPA has eroded the strength of the banking industry and public sector banks are routinely seeking an infusion of capital by the government. Besides, the issue has also raised immense political interest. If the recent remarks are anything to go by, the BJP believes that the legacy of massive NPAs has been created during the long rule of the Congress, when a large number of businessmen bent the rules and availed astronomical amounts of money as loans. They never repaid their dues – and Mallya is also one of them. But, the Congress believes that the present government has helped a number of dubious businessmen flee the country after their frauds came to light. Among the prominent businessmen who have fled the country during the regime of the current NDA government are Lalit Modi, Vijay Mallya, Mehul Choksi and Neerav Modi. The Congress has time and again blamed the Centre for facilitating their escape from the country. But, the NDA government says that it has framed laws that empower the investigating agencies to confiscate their properties and brand them as fugitives. It says, it has, instead, intensified efforts to bring back these fugitive businessmen and make them pay up the loans that they have taken from the Indian banks. The debate is likely to continue as more cases of bad loans and scams come to light. Amid the controversy over NPAs and businessmen fleeing the country after taking loans worth thousands of crores of rupees, industry experts have advised for the handing over of the management of public sector banks to the private sector. While this may not happen immediately, the government can at least ensure that it does not interfere with and influence their decision on loan disbursals.