New Delhi: In an apparent reference to Vijay Mallya case of loan default, finance minister Arun Jaitley on Monday wondered whether the legal system has become hurdle in the process of loan recovery leading to “escape” of wilful defaulters.
Mr Jaitley stressed that not a single loan was written off by banks and not a single rupee was written off. Explaining the issue of bad loans, he said when an account becomes NPA from standard, the categorisation changes but there is no debt waiver.
“Not a single rupee was waived off. It is only re-provisioning from one category, you go to another category,” he said while replying to a debate on Budget in the Lok Sabha. On the issue of wilful defaulters, the finance minister said there are legal hurdles in dealing with such borrowers given the existing bankruptcy framework.
“You take legal action where recoveries are to be made. Here I must tell you it’s a big challenge to the legal system. The most visible of defaulters who are managing to escape out of the country. A question we have to ask ourselves... did the legal system act as a hurdle in the recovery? How many cases the banks have had to fight against such people and this is for every institutions now to really look within,” he said. He, however, did not make any direct reference to Mr Mallya.
