Name, shame corporate houses for defaulting on loans: Parliamentary panel member
New Delhi: As NPAs of public sector banks soared to a staggering Rs 6.8 lakh crore, the chairman of a key Parliamentary panel on Sunday favoured naming and shaming corporate houses which default on repayment of bank loans.
Public Accounts Committee (PAC) chief K V Thomas hopes "naming and shaming" such corporate houses may help financial institutions get back their money. Out of the Rs 6.8 lakh crore of Non-Performing Assets of public sector banks, a whopping 70 per cent are those of big corporate houses, Thomas said, adding hardly one per cent of it constitutes loans to farmers.
"In case of farmers or small traders, banks act strong and they go to their houses to recover money. They even get published their name and photograph in newspapers. But when it comes to corporate houses, they don't reveal the names.
"We intend to give names of such big defaulters who owe money to banks in our reports to be submitted in Lok Sabha before the end of budget session," he told PTI. The five-week-long second half of the budget session is scheduled to begin from March 9.
The PAC has suo motu chosen to examine the issue of bad loans of public sector banks as these were rising and needed to be checked, he said. "We have met Chairmen and Managing Directors (CMDs) of a few public sector banks, including Indian Overseas Bank, Indian Bank and Allahabad Bank, among others, to discuss the issue. We plan to meet other CMDs too," he said.
Thomas said the banks have told the Committee that big corporate houses had taken loans for various infrastructure related works in sectors like civil aviation, energy and road construction, among others. "Banks need to answer as to what was the guarantee taken by them before giving such big amounts as loan to corporate houses and what action is being taken by them. The rise in bad loans worries me. "We will be giving our detailed report on NPAs to Parliament. The report is likely to be submitted before the end of the budget session," he said.
As of September 30, 2016, the NPAs declared by various scheduled commercial banks stood at a stupendous Rs 6,65,864 crore, according to the government's reply in the Rajya Sabha last month. According to the Finance Ministry data, the NPAs of the country's largest lender State Bank of India is Rs 97,356 crore, followed by Rs 54,640 crore of Punjab National Bank and Rs 44,040 crore of Bank of India.
Bank of Baroda has NPAs of Rs 35,467 crore, Canara Bank Rs 31,466 crore, Indian Overseas Bank Rs 31,073 crore, Union Bank of India Rs 27,891 crore, IDBI Bank Limited Rs 25,973 crore, Central Bank of India Rs 25,718 crore, Allahabad Bank Rs 18,852 crore and Oriental Bank of Commerce Rs 18,383 crore.
