Sandeep Pandey for BeyondHeadlines
It is believed that over 2.5 lakh farmers in India have committed suicide over the last two decades since neo-liberal economic policies have been implemented. In other words as the dependence of Indian farmer has increased on market, he is finding it difficult to repay loans taken to buy various farm inputs and feels so humiliated when harassed for repayment that he decides to end his life. On the other hand there is story of some of India’s super rich who have also borrowed money from the banks but their response is starkly different from the farmers’ and the banks also appear to be very liberal with them. The Banks try to restructure their bad loans as good loans and if everything else fails their loans are simply written off or shown as non-performing assets.
The All India Bank Employees’ Association (AIBEA) has released a report titled ‘Bulging Bad Loans in Banks.’ It has made public a list of 50 defaulters who owe Rs. 40,000 to 24 Public sector banks and a longer list of 400 defaulters who owe Rs. 70,000.
Whereas bad loans in Public sector banks till March 2008 were only Rs. 39,000 crores, by the end of March 2013 the figure had bulged to Rs. 1,64,000 crores and in September 2013 to Rs. 2,36,000 crores. Rs. 3,25,000 crores of bad loans were restructured and shown as good loans. Rs. 2,04,000 of bad loans were written off in the last 13 years.
Kingfisher Airlines tops the list of defaulters with Rs. 2,673 crores of loans not repaid. Of this it owes Rs. 601.64 crores to Punjab National Bank, Rs. 566 crores to Bank of India and Rs. 444.93 crores to Bank of Baroda. Additionally, CBI has recently revived a two year old enquiry into lending of Rs. 950 crores by the Industrial Development Bank of India in spite of negative credit rating and negative net worth. In all the company, now defunct, owes Rs. 7,000 crores to a consortium of 17 banks with the highest amount of Rs. 1,600 crores due to SBI. In spite of this Vijay Mallya, the owner of Kingfisher Airlines, sponsors golf tournaments and horse racing. He is the owner of IPL cricket team Royal Challengers Bangalore and a Formula One car racing team Force India. Instead of repaying his loans he splurges money on extravagant things and gets away with it. He has also entered the Parliament through Rajya Sabha and from a liquor barren become a respectable MP. The relevant question is when Subrata Roy of Sahara can be put in jail to recover Rs. 10,000 crores from him, why can’t Vijay Mallya also meet the same fate. In spite of owing such a big amount to the banks he wanted the government to bail out his loss making airline. He is taking the government and the people of this country for a ride. But no punitive action has been initiated against him by the government. For some inexplicable reason the CBI went to sleep on enquiry against his company. It was only after Syndicate Bank Chief Managing Director S.K. Jain was arrested along with VC and MD of Bhushan Steel Ltd. Neeraj Singal in a matter of lending by Bank to the company that CBI seems to have woken up. Jain is accused of having received a bribe of Rs. 50 lakhs for enhancing the credit limits of some companies in violation of laid down procedures.
Winsome Diamond & Jewellery Co. Ltd. is the second biggest defaulter with Rs. 2,660 crores not repaid. Electrotherm India Ltd., Zoom Developers Pvt. Ltd., Sterling Biotech Ltd., S. Kumar’s Nationwide Ltd. and Surya Vinayak Industries Ltd. are the next five big defaulter with amounts not repaid as Rs. 2,211 crores, Rs. 1,810 crores, Rs. 1,732 crores, Rs. 1,692 crores and Rs. 1,446 crores, respectively.
Among Nationalised Banks, State Bank of India registers the biggest Gross Non-Performing Assets of Rs. 51,189 crores and PNB among Public Sector Banks shows Rs. 13,465 as Gross NPA in March 2013. Among private banks ICICI Bank Ltd. tops the list of Gross NPA in 2013 with Rs. 9,607.75 crores.
The AIBEA has demanded that government should take stringent measures to recover bad loans in Banks, amend recovery laws to ensure speedy recovery of bad loans, declare wilful default of bank loans as criminal offence, debar bank loan defaulters from holding public office, conduct probe into sanction of bad loans and punish the guilty. They have also demanded that government and RBI should periodically publish the list of bank loan defaulters and that Banks should be brought under effective audit on the lines of CAG and made accountable to the Parliament.
The AIBEA says that banks deal with Rs.78 lakh crores of people’s hard earned savings. People’s money should be utilized for people’s welfare. National savings should be used for national development and not for the benefit of some private corporations.
The AIBEA must be commended for having come out with this document in national and public interest. The employees have done a great service to the people. Now it is up to the people to put pressure on their government to recover all this money shown as bad loans or NPAs. Most of these people like Vijay Mallya are in a position to repay the loans. It is just that the government is allowing them to go scot free. The government must get strict with them. A poor country like India cannot afford thousands of crores of rupees to be simply locked up.