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Concerned over the sharp rise in bad loans, Finance Minister Arun Jaitley today said banks are taking a number of steps against willful defaulters to recover the loans.
"It is normal for the banks to have 2-3% of NPA (Non-Performing Assets). But in the last 2-3 years the NPA has increased substantially and gone up to 6%... stress assets have also been increased," he said during the Question Hour.
Jaitley said actions against those who have failed to repay the loan amount have been initiated under various provisions of law - including under Indian Penal Code and and civil laws.
To a question on action taken against promoters of Kingfisher Airlines for having huge outstanding loans, he said banks are dealing with all defaulters as per law and actions have been taken that include declaring the promoters and directors as willful defaulters, barring them from obtaining loans from any bank in the future and auctioning mortgaged property.
Jaitley said there are people and companies who are under stress due to the economic slowdown in the last 2-3 years and in such cases banks allow companies to restructure the loan repayment process to give them relief.
The minister said the Sebi Act has been amended recently with tough provisions and steps are being taken against those companies that cheat people in the name of chit funds.
"Police has full right to take action and many people are in jail for such crime," he said.
