With mounting public pressure to act against wilful defaulters, Arun Jaitley has rightly directed to go all out to recover money from the errant borrowers. Wilful defaulters owe almost one-fifth of the bad debts in the stressed banking system. They have the resources to repay, but they don't do so. The number of wilful defaulters and the amount they owe to banks have risen exponentially over the past two years.
Most loan defaulters have political blessings. Default by such borrowers amounts to cheating the ordinary people who are depositors of the banks. Reserve Bank of India (RBI) Governor Raghuram Rajan has added more teeth to the banks in their fight against loan defaulters. The RBI has also directed that if a guarantor refuses to pay lenders, despite having sufficient means to pay the dues, banks could declare such a guarantor a wilful defaulter. The time has now come for the government to deal with such persons with an iron hand. There are two ways to tackle the problem - a tighter loan sanctioning process and a bankruptcy law to deal with failed companies.
Vinod C Dixit, Ahmedabad
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