Increase in default cases with 'up to reach' law

Due to 'above-the-reach' measures, banks are not ready to take immediate action against defaulters in order to sink banks. Announces a list of 4 big bank defaulters. However, according to the civil data, as of December 1, 3 companies had paid Rs. An immense amount of 1.8 lakh crore has been chewed. For the last four-five years, the issue of banks' NPAs has been on the verge of debate. The Reserve Bank and the government have drafted regulations to reduce the NPAs of banks. With these regulations, the level of NPA has definitely dropped. But, the stress that has arisen over the issue of banks has not made any difference.

The list, as announced by the Reserve Bank, is earlier than the default. There have also been several defaults in the last two-four years. In some cases, homeownership has been settled. Thus, despite the implementation of these rules, the adversity has not been fully resolved.

However, following these rules, it can be said that the link between the bankers and the promoters has finally been broken. Nevertheless, it is equally true that due to 'access to the top', no action is taken against defaulters ready to sink banks. It is not yet known whether the person responsible for the bed loan has been punished, except in the case of single case. Despite being declared a default, many people are still living a comfortable life that is responsible for the upward reach and loopholes in the law.

Other measures, including the Reserve Bank of India's controls, have shown a tendency for banks to decline in NPAs. However, if we look at the other side of the issue, the burden on the banks is likely to increase.

According to a recent study by the India Ratings Company, banks have raised Rs. It has not yet declared a corporate loan of Rs 1.8 lakh crore as NPA. About 5% of the loans that banks do not categorize this huge amount are likely to become NPAs by September 1.

It will be worth mentioning here that by September 1, a total of 5% or Rs. 1 lakh crore is corporate debt. Of this, 5.5 percent of corporate debt is shown by banks as general debt. With this, it will generate Rs. The NPA is likely to be in the second quarter of 1-3. Till September 1, Rs. 1.5 / 5 lakh crores of loans to banks 1 lakh crore is likely to be returned. Thus, banks are burdened with the burden of carrying corporate loans.

There is a list of various reasons to be concerned about this issue, the list is long back. Under the process of insolvency it is understandable to give cases. However, there are a plethora of such cases here. A large number of these cases are one of the reasons why cases are not settled in due time. The settlement of the cases is delayed unbearably. One of the biggest concerns is the growing economic losses of banks. During the liquidation process, new details of the financial crisis of the companies are coming out.

There are figures in which banks have to suffer more economic losses. After checking all the booklets, if banks now have to 'write off' a large amount, will there be any funds left to lend to the banking system? Will banks be able to distribute debt debt with as much confidence as before? If the answer is no, then India's economy is steadily drifting in the direction of extinction for a long time. The key to economic loss will be a long time.

It is possible that some banks may be trapped under their own unsecured credit. Being a government is not different from going into liquidation. But if it is the RBI or the finance ministry, the responsibility of redeeming these banks is the loss of the country. It is well-known that the maximum number of debt blowers promotes greenery in the country and abroad. Whatever claims the government makes, whether the Sensex goes north or the south, the bitter reality is that there is often a day of private investment in India.

It usually takes longer to complete the entire process of bankruptcy. Private companies that overtake insolvent companies at cost of acquiring sick companies acquire valuation only if there is a competitor against them. The government should make rules so that insurance companies can be sold at attractive and yet reasonable prices. At present, there have been instances where the ailing banks may have suffered losses at a higher rate than the sale of sick companies.

Strict laws that minimize the 'loss' of banks should be implemented. A large portion of the bed loans or NPAs are in the power sector. Electricity is one of the people in the country in which prices vary from state to state. Its consumption will continue to rise in the coming decades. Delays in power sector schemes increase interest rates. As a result the purpose of the scheme is killed. At present, there is a disconnect between the supply of coal and its cost.

Until now, the Reserve Bank did not disclose the names of such major defaulters. It will be important to see what steps the government is taking now after this announcement. Because, in the bank default case, no special action has been taken so far. Hopefully, the government will take further action on this issue in the coming days. That would be enough to justify the decision taken in the interest of the economy.