PAC in favour of naming & shaming strategy to curb NPAs
Published: Mar 06, 2017
TIOLCORP News Service
NEW DELHI, MAR 06, 2017: AS NPAs of public sector banks soared to a staggering Rs 6.8 lakh crore, the chairman of a key Parliamentary panel today favoured naming and shaming corporate houses which default on repayment of bank loans. Public Accounts Committee (PAC) chief K V Thomas hopes "naming and shaming" such corporate houses may help financial institutions get back their money. Out of the Rs 6.8 lakh crore of Non-Performing Assets of public sector banks, a whopping 70 per cent are those of big corporate houses, Thomas said, adding hardly one per cent of it constitutes loans to farmers."
In case of farmers or small traders, banks act strong and they go to their houses to recover money. They even get published their name and photograph in newspapers. But when it comes to corporate houses, they don't reveal the names.
The intention is to give names of such big defaulters who owe money to banks in PAC reports to be submitted in Lok Sabha before the end of budget session. The five-week-long second half of the budget session is scheduled to begin from March 9. PAC has suo motu chosen to examine the issue of bad loans of public sector banks as these were rising and needed to be checked. PAC has met Chairmen and Managing Directors (CMDs) of a few public sector banks, including Indian Overseas Bank, Indian Bank and Allahabad Bank, among others, to discuss the issue.
The banks have told the Committee that big corporate houses had taken loans for various infrastructure related works in sectors like civil aviation, energy and road construction, among others. Banks need to answer as to what was the guarantee taken by them before giving such big amounts as loan to corporate houses and what action is being taken by them.
PAC will be giving detailed report on NPAs to Parliament. The report is likely to be submitted before the end of the budget session. As of September 30, 2016, the NPAs declared by various scheduled commercial banks stood at a stupendous Rs 6,65,864 crore, according to the government's reply in the Rajya Sabha last month.