Determination of PM to recover bad loans is laudable, but action reports will give more weight to his words


At the launch of India Post Payment Bank in Delhi on September 1, the Prime Minister Narendra Modi pinned the blame on the previous UPA government for issuing huge loans, only at a phone call to tycoons with close proximity, which turned into non-performing assets. He said releasing loans in such a reckless manner put the economy on a “landmine” and claimed that every penny given at the behest of “namdars” (dynasts) will be recovered. Bad loans or non-performing assets are not only a crushing burden on the banking system, but also a hurdle for the growth of the economy. The Prime Minister said, “loans were given on phone calls made by ‘namdars’ ” without referring to anyone. He quoted figures also to make his blame argumentative. He said since Independence to 2008 Rs 18 lakh crores were given, but within six years thereafter the figure rose to 52 lakh. He said his government brought out true figure of the non-performing assets that was a scam of the previous government. Since 2014 when he came to power no loan was released to any defaulter. The banks were asked to recover the bad loans and review all the loans over and above Rs 50 crores.

Now when the NDA government is treading cautiously, it should devise ways and means to recover the bad loans. Particularly when some jewelers and others have fled the country with large sums of money during the Modi regime, the obligation of the government is more pressing to show its sincerity toward good governance. Hectic efforts are being made to bring the fugitives back home, but no success has been achieved so far. The blame game is on about the crucial subject. The Congress leader P Chidambaram demanded to show the details of the loans given during the NDA government and how many of them turned bad loans. However, he could not contradict the charge leveled by the Prime Minister. To gain the confidence of the people, the present government should take concrete steps to recover the bad loans. Before the banking system meets a serious crisis, the process of recovery of bad loans should start.

The impact of the bad loans is evident from the observation of the vice chairman of Niti Aayog Rajiv Kumar who said on September 3, economic growth in six quarters starting from the last quarter of 2015-16 slowed down due to rise in non-performing assets and not the 2016 demonetisation drive. This may be the defence of the note ban scheme but the negative impact of the bad loans cannot be ignored. He blamed the former Governor of the Reserve Bank of India Raghuramram Rajan for the rise in bad loans. This also reflects on the NDA government. While the banking system is involved in the scam of bad loans, the Prime Minister praised India Post Payment Bank that would include masses in the banking system. The government holds 100 per cent equity in the system. With 3 lakh postmen and more than 150000 post offices the service is bound to penetrate into villages also.

To keep its image bright, it is the first and foremost duty of the government to recover the bad loans and bring the fugitives involved in bank frauds back home as early as possible lest it face serious allegations from the opposition on the eve of the elections.


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