New Delhi, Aug 26 : In a scathing attack on the former Finance Minister P.Chidambaram, the Bharatiya Janata Party (BJP) on Friday stated that the number of wilful defaulters in the country have been reduced by 56 percent in the past eight years, and banks have recouped more than Rs 1,86,000 crore from the written-off loans accounts of people who were wilfully defaulting from 2014 to 2021.In a string of tweets that were posted by the former Finance Minister Chidambaram had stated: “Earlier, banks would write off corporate loans with fear because they would be scrutinized by RBI and MoF.Today, they can write off loans with impunity, thanks to the IBC process.Banks gather in an Committee of Creditors & approve the Resolution Plan demanding a huge write-off.”
Citing Chidambaram’s tweet, BJP department head for information technology Amit Malviya stated: “Such puerility from a former Finance Minister is a declaration about his capabilities and a stark reminder of the shady UPA period.Insolvency is a global phenomenon that our country adopted late due to cronyism, as well as 60 years of subordination to the family.
“Insolvency and Bankruptcy Code (IBC) is geared towards resolution, not recovery.It’s goal is to ensure that a company is able to survive the toxic promoters.Mechanisms like DRT/SARFAESI exist to help with loan recovery.IBC is still superior to other mechanisms in place.”
Malviya said that the IBC resolution isn’t the end of the story for banks.
Usually, the recovery of Guarantors and reverse of avoidance transactions occur at a later time, post resolution, and therefore are not the part of the resolution process.
He stated that as result of the extensive measures that the government has taken and RBI to reduce the number of NPAs as well as efforts to reduce them scheduled commercial banks were able to recover 8,603,369 crore over the last eight years (provisional data) from NPAs.
“Wilful defaulters in India have dropped by 56 percent in the past 8 years, ranging from 2,469 instances of willful defaults in 2014-15 to 1,063 in 2020-21.Banks have recovered more than Rs.18,000 lakh crore from loan accounts written off of willful defaulters between 2014 through 2021.” Malviya added.
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