Yechury asks PM to work on urgent plan for loan recovery

Alleging that non-repayment of Rs 8.75 lakh crore of loans by "few big" corporate houses to public sector banks was "misappropriation" of people's money, CPI(M) today asked Prime Minister Narendra Modi to work on an urgent action plan to start recovery of pending dues from top 100 borrowers.
In a letter to Modi, CPI(M) General Secretary Sitaram Yechury asked the Prime Minister to ensure no further public money is given to public sector banks (PSBs) till all the assets of the defaulters concerned have been monetised.
The failure in doing so, he said, will mean the government is making "poor" Indians pay for "profligacy" of crony capitalists and is "beholden" to the power of ill-gotten money.

He referred to RBI's Financial Stability Report and said it highlighted "precarious" situation of the banking sector.
"More than Rs 8.5 lakh crore (Rs 8,55,551 crore) of the loans given by our banks have not been returned by the borrowers. Going by their response and the action taken by your government so far, it is highly unlikely that these monies will be returned anytime soon," Yechury said.
"Needless to add, this is every single Indian's money which has been misappropriated by these borrowers, which are mainly big corporates," he said.

Yechury said, according to the report, as of end of March this year, Gross Non-performing Assets (GNPAs) of all scheduled commercial banks (SCBs) stood at Rs 5,60,822 crore, 7.71 per cent of their gross advances of Rs 72,73,927 crore.

In addition, the restructured standard advances are at Rs 2,94,729 crore, 4.05 per cent of the gross advances, he said.
While the NPAs have increased by nearly 80 per cent in the last one year, he said it is sad to note that the government's efforts for greater recovery have not shown any corresponding rise in the resolve to recover these.
The Marxist leader also quoted Comptroller and Auditor General of India (CAG) Shashi Kant Sharma as saying a few days back that there is a belief that a large part of these amounts may have been transferred abroad and may never get recovered.

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Yechury said Modi had during election campaign famously "promised" to bring back all the black money from abroad and deposit Rs 15 lakh to Rs 20 lakh in every Indian's bank account soon after assuming office of the Prime Minister.
"Leave alone your promise of bringing that amount back, money from the banking system under your watch, if the country's top auditor is to be believed, has been transferred abroad and may never get recovered," the Rajya Sabha member said.
He said RBI Governor Raghuram Rajan's tenure ends in September, while the asset quality review (AQR) which has brought out the facts about NPAs will be over by March next year.

The "vicious" attack on Rajan, under whom the AQR was initiated which further brought out the NPA details, by BJP leaders meanwhile and the Prime Minister's alleged silence over the issue during the period has "led many to believe that Modi is not interested in completing the bad loan clean-up", he said.
"This leaves no other explanation but to conclude that your government actively patronises and promotes crony capitalism," he said.
Yechury said that the government's reported plan to recapitalise PSBs by eroding RBI's capital base "must be shelved". This is a dangerous idea as it diminishes RBI's capacity to withstand internal and external economic shocks, he noted.

"The RBI has been a fiercely independent institution and by following such a dictat, the central bank would be seen as a government tool. Moreover, by becoming owners of these banks, the RBI will have mixed objectives as it conducts and regulates monetary policy," he said.