Congress leader P Chidambaram on Thursday said the Reserve Bank of India should direct banks to continue to show “outstanding loans” from fugitives on their books and take steps to recover them rather than writing them off.
On Tuesday, the RBI had released a list of top 50 defaulters in response to a Right to Information query. These 50 defaulters included the companies of absconding diamantaire Mehul Choksi and fugitive businessman Vijay Mallya. In March, Congress leader Rahul Gandhi had in Parliament asked for the same details on the defaulters as the RTI query.
Referring to Union Minister Prakash Javadekar’s jibe at Gandhi, Chidambaram said the debate on waivers and write-offs was merely academic, adding that the only people “mighty pleased” by such an argument were Nirav Modi, Choksi and Mallya. Javadekar had said Gandhi “should take tuition” from Chidambaram to understand the difference between a “write-off and waive-off”, after Gandhi accused the Bharatiya Janata Party of hiding the “truth from Parliament” as the ruling party’s “friends” were on the defaulters’ list.
“The debate on waiver or write-off is academic. People who are mighty pleased are Nirav Modi, Mehul Choksi and Vijay Mallya! Rules are made by human beings. If a rule can be made, it can be unmade too,” Chidambaram tweeted.
“Only way to undo the monumental error is for RBI to direct banks to reverse the entries and continue to show the unrecovered loans from the fugitives as “Outstanding Loans” on their books and take steps to recover them.”
Information released by the RBI had revealed that the top 50 defaulters have alone accounted for loans worth Rs 68,607 crore being written off in the banking system until September 2019. Earlier this week, the Congress had alleged that the Centre had written off these loans.
Late on Tuesday night, in a series of tweets, Finance Minister Nirmala Sitharaman rebutted Gandhi’s allegations on loan write-offs. Sitharaman had accused Gandhi and Congress leader Randeep Surjewala of misleading people and said the party had resorted to “sensationalising facts by taking them out of context”.
The finance minister had also detailed the provisions for non-performing assets. “Provisions are made for NPAs according to the four-year provisioning cycle laid down by the RBI,” she said. “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.”
She had provided details of certain high-profile cases, including that of Mallya, Choksi and Modi. Sitharaman had also claimed the Narendra Modi-led government had 9,967 recovery suits and 3,515 first information reports invoking Fugitive Amendment Act.