CON­FIS­CATE PROP­ERTY AND PUN­ISH WIL­FUL COR­PO­RATE DE­FAULT­ERS FOR NOT RE­TURN­ING BANK LOANS

Economic Challenger - - MAKE IN INDIA - - Ed­i­tor

Bank­ing in­dus­try in In­dia is strug­gling with NPAs or bad loans. Big cor­po­rates and rich peo­ple think that they can eas­ily cheat the bank­ing in­dus­try and re­main fair in the eyes of law be­cause there are no strin­gent pro­vi­sions to pun­ish those re­spon­si­ble for the wil­ful de­fault in re­turn­ing the prin­ci­pal and in­ter­est amount of the loan.

Vi­jay Mallya is the lat­est case in the long list of such wil­ful de­fault­ers. He owes banks over 9000 crores and he has run away on March 2, 2016 to U.K. pre­tend­ing that he will soon re­turn to In­dia to prove him­self a law abid­ing cit­i­zen. If he does not re­turn, will the be brought back by E.D. and put be­hind the bars.

The 17 - lender group headed by SBI is seek­ing re­pay­ment of 4900 crore as up­front plus in­ter­est. They want cash on ta­ble 2000 crore by Septem­ber and rest af­ter­wards. Bankers have to re­spond to the pro­posal at the next Supreme court hear­ing Sched­uled for April 26, 2016. and Mallya has to dis­close de­tails of as­sets by April 21.

Mallya is not alone. There are 44 com­pa­nies in all that owe 4.8 lakh crore to the pub­lic sec­tor banks like SBI, PNB, BOB, Ca­nara Bank etc. As per in­for­ma­tion pro­vided by Credit In­for­ma­tion Bureau of In­dia (CIBIL), there are 18176 wil­ful de­fault­ers in the coun­try owing 2,35,000 crore. Th­ese bor­row­ers are ei­ther in­di­vid­u­als or cor­po­rates. Th­ese owe each be­tween 2 lakh to 1 crore to banks in In­dia. Upto Septem­ber 2015 banks had lodged FIR in the po­lice against only 1624 de­fault­ers in a list of 7265 such big de­fault­ers CIBIL has given. 50 In­dian Com­mer­cial banks out of a to­tal of 90 have been cheated by wil­ful de­fault­ers. EQUIFAX, EX­PE­RIAN and CRIF have also re­leased their own lists of such wil­ful de­fault­ers. Why of­fi­cers and em­ploy­ees of loan­ing banks are not held li­able for th­ese bad loans? Why their salaries, pro­mo­tions and pen­sions not stopped and why they are still roam­ing free with­out any fear? A lay man has to run from pil­lar to post for a small bank loan and if he de­faults he is held ac­count­able. Bank­ing in­dus­try in In­dia is to-day run­ning in cri­sis. 73% of bad loans are from rich per­sons like Mallya. Many of th­ese un­paid loans are be­ing writ­ten off in the name of pro­vi­sion­ing and each year banks are in­creas­ing their pro­vi­sion­ing out of profit. Why the tax payer should pay the price for mis­takes com­mit­ted by wil­ful de­fault­ers? The gov­ern­ment of In­dia must ini­ti­ate crim­i­nal pro­ceed­ings against per­sons like Vi­jay Mallya and their prop­er­ties in In­dia must be con­fis­cated im­me­di­ately till the loan is com­pletely paid off. Strong po­lit­i­cal will is also re­quired in tack­ling such de­fault­ers . The ac­tion should be so strong that cor­po­rates will think twice be­fore go­ing the way of Vi­jay Mallya. If there is any le­gal him­drance the par­lia­men­tar­i­ans should stand to­gether to give ex­tra teeth to the judiciary.

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