Defaulters’ joy? ‘No law on NPAs’

He was replying to supplementaries by Basudeb Acharia (CPM) and Lalu Prasad (RJD) during Question Hour.

Both Acharia and Prasad demanded tabling of the names of big defaulters and blamed big corporate houses and “industrial families” for dodging laws. Prasad demanded that assets of such defaulters be seized.

He said SP chief Mulayam Singh Yadav has names of 130 industrial houses who have defaulted on loans.

Pointing that banking confidentiality clause does not allow naming the defaulters,he said by disclosing the names as demanded by Acharia,a person would be declared insolvent even before a court does so.

“Depositors’ money will be lost (by doing so),” Mukherjee added.

To a question on fixing responsibility of bank officials in recovering debt,Mukherjee said senior executives are made accountable and measures like denying promotion,reduction in rank and censure are resorted to as punishment.

In a written statement,Mukherjee ruled out bringing a legislation to recover NPAs.

“…To improve the health of financial sector,to reduce the NPAs and to create a good recovery climate,RBI and the Government have already taken various steps over the years including prescribing prudential norms for provisioning and classification of non-performing assets,guidelines for prevention of slippages,corporate debt restructuring and one time settlement schemes…,” he said.

On the issue of increasing NPAs,he said the increase,”in absolute terms,is broadly on account of the consolidated impact of business cycles,economic slowdown,delay in implementation of projects and consequent repeated restructuring of accounts by banks and credit growth across the banking industry during the last few years.”

Not satisfied with the reply of the Finance Minister,Prasad walked out complaining that his queries have not been answered.