New Delhi, Aug 26: Hitting out at former Finance Minister P. Chidambaram, the Bharatiya Janata Party (BJP) on Friday said that wilful defaulters in the country have decreased by 56 per cent in the last eight years, and the banks have recovered over Rs 1,86,000 lakh crore from written-off loan accounts of wilful defaulters from 2014 to 2021.
In a series of tweets, former finance minister Chidambaram had said: “Earlier, banks would write off corporate loans with trepidation because they would be asked questions by RBI and MoF. Now, they do it with impunity through the IBC process. Banks get together in a Committee of Creditors & approve a Resolution Plan demanding a huge write-off.”
Quoting Chidambaram’s tweet, BJP information technology department head Amit Malviya said: “Such puerility from a former Finance Minister is a statement on his capability and a grim reminder of the scam-filled UPA era. Insolvency is an internationally matured phenomenon that our country adopted very late, due to cronyism and 60 years of subservience to the family.
“Insolvency and Bankruptcy Code (IBC) targets resolution, not recovery. It aims that a company survives from it’s toxic promoters. Mechanisms such as DRT/SARFAESI still exist for loan recovery. IBC is still better than other existing mechanisms.”
Malviya noted that the IBC resolution is not the end for banks.
Normally, recoveries from guarantors and reversal of avoidance transaction happen at a later date, post-resolution, so they do not constitute part of the resolution plan.
He mentioned that as a result of the comprehensive steps taken by the government and RBI to check the number of NPAs and efforts to bring them down, scheduled commercial banks recovered 8,60,369 crore over the last eight financial years (provisional data) from NPAs.
“Wilful defaulters in India have decreased by 56 per cent in the last 8 years, down from 2,469 cases of wilful defaults in 2014-15 to 1,063 in 2020-21. Banks recovered over Rs 1,86,000 lakh crore from written-off loan accounts of wilful defaulters from 2014 to 2021,” Malviya added.