Union Finance Minister Arun Jaitley on Tuesday refuted to rumors against the government waiving off any loans of big NPA defaulters.
The minister in his blog mentioned, "Time has come for the nation to be apprised of facts in this regard."
"Rather than take firm decision with regard to such debtors, the then Government, through relaxation by banks in loan classification kept these defaulters as non-NPA accountholders. These loans were restructured through this, the loss to banks was kept hidden. The banks kept giving loans repeatedly to these debtors and kept ever-greening the loans," Jaitley said in his blog.
He mentioned that the 'Asset Quality Review' carried out for clean and fully provisioned balance-sheets in 2015 revealed high NPA. Through correct recognition of NPA, the NPA amount of Public Sector Banks rose from Rs. 2,78,000 crore in March 2015 to Rs. 7,33,000 crore in June 2017.
"Meaning thereby that those loans, of about Rs. 4,54,466 crore, which were actually fit to be NPA and were under the carpet, were recognised after intensive scrutiny under Asset Quality Review," he added.
Hailing the strong steps taken over the last three years, not only have the problems received as legacy been addressed but reforms for rebuilding the strength of Public Sector Banks have been boosted.
He mentioned that the process of creation of strong and large banks began with the integration of State Bank of India, and the recapitalisation announced will bolster this process.
While honest businesspersons will be able to access loans from strong and reformed banks, strict and clear law and the all-round clean-up initiated by the Government would result in a clean system in the country.
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