In recent years, several prominent corporate groups have found it difficult to repay their loans, including the flamboyant Vijay Mallya, whose now-grounded Kingfisher Airlines owes over Rs 7,000 crore, mostly to public sector banks. Sidhartha, TNN | Jun 23, 2014, 05.02AM IST NEW DELHI: The government has asked banks to launch an offensive against the country's top 50 loan defaulters to change the perception that state-run lenders tend to be soft towards large borrowers while giving little leeway to retail borrowers and SMEs.
Top bankers told TOI that the issue was discussed by financial services secretary G S Sandhu last week with bank chiefs from several leading public sector players, including State Bank of India, Punjab National Bank and IDBI Bank. "There is a perception, which may or may not be correct, that we don't act decisively against corporate borrowers and the government is keen to dispel that notion,"said a bank chief, who attended the meeting in the finance ministry. Sources said the lenders have been asked to initiate all possible action against the top 50 defaulters to send a message that the companies cannot get away without clearing their dues to banks. On their part, bankers are learnt to have told the government that it is not often easy to recover the dues and they have to undergo a long process of litigation. "Every notice is challenged in courts and it is very tough. It is not as if we don't want to recover the dues," said a banker, adding that often they come under pressure from the finance ministry to restructure loans before they turn no-performing assets. Apart from the change of guard at the Centre, the government is keen that banks recover their dues from defaulters as they are saddled with a pile of bad debt, putting their credit worthiness at risk. Global rating agencies have flagged rising level of sticky assets as one of the major concerns for the Indian economy. In recent years, several prominent corporate groups have found it difficult to repay their loans, including the flamboyant Vijay Mallya, whose now-grounded Kingfisher Airlines owes over Rs 7,000 crore, mostly to public sector banks. His lavish lifestyle, despite his company's financial woes, has raised many eyebrows. Kolkata-based United Bank of India has already served a notice to treat Mallya and others linked to the airline as "wilful defaulters" which will choke loan flow to all group companies. The other prominent defaulters in recent years include Winsome Diamond, Zoom Developers and S Kumars Nationwide. The All India Bank Employees Union released a list of 406 loan defaulters, who together owed over Rs 70,000 crore and are facing legal action. Banks are grappling with non-performing assets of over Rs 2 lakh crore, while loans to several large projects have been restructured, which prevented them from turning bad debt. In recent weeks, the government has begun talks for initiating a series of measures to reduce the pile of debt, including a new law that will link the jail term to the size of the default, apart from enabling lenders to initiate criminal action. Similarly, the debt recovery tribunal set up is being reworked and discussions on a new asset management company have begun. TPG may buy surgical equipment company Sutures PG -- an existing investor with about a 22% stake -- could buyout another shareholder and India-focused private equity fund CX Partners which has 30% ownership in the company, sources told TOI. Staffing companies join search for women leaders On their part, global recruitment firms like Antal International and Amrop are conducting in-depth analysis to map women leaders. This has become necessary as companies are determined to fill certain leadership posts with women. More Business News>> To manage your newsletter subscription settings, click here Other Newsletters from TOI : Movie Reviews | Life & Style | Top Headlines [image] -- nothing is difficult unless you make it appear so. r. aravind, D R O in bank of baroda, mobile no: +91 9940369593, email id : [email protected], [email protected]. Register at the dedicated AccessIndia list for discussing accessibility of mobile phones / Tabs on: http://mail.accessindia.org.in/mailman/listinfo/mobile.accessindia_accessindia.org.in Search for old postings at: http://www.mail-archive.com/[email protected]/ To unsubscribe send a message to [email protected] with the subject unsubscribe. To change your subscription to digest mode or make any other changes, please visit the list home page at http://accessindia.org.in/mailman/listinfo/accessindia_accessindia.org.in Disclaimer: 1. Contents of the mails, factual, or otherwise, reflect the thinking of the person sending the mail and AI in no way relates itself to its veracity; 2. AI cannot be held liable for any commission/omission based on the mails sent through this mailing list..
