Banks should recover loans from affluent promoters:Chidambaram

In a stern warning to wilful defaulters, Finance Minister P Chidambaram today asked banks to take firm steps against affluent promoters to recover loans from sick companies owned by them. "We cannot have an affluent promoter and a sick company. Promoters must bring in money ... We wish banks take firm steps to recover NPAs," he told reporters after meeting the heads of PSU banks and financial institutions here. The warning comes in the backdrop of several companies, including liquor baron Vijay Mallya's Kingfisher Airlines, unable to repay bank loan. Gross NPAs of PSU banks have risen from Rs 71,080 crore as on March 2011, to Rs 1.55 lakh crore as on December 2012, of which corporate accounts constitute 53.68 per cent. Of this, about 172 corporate accounts are NPAs of more than Rs 100 crore at the end of December 2012.

The amount involved in such cases is to the tune of Rs 37,194 crore. Asking banks to take more steps to deal with the rising NPAs without hurting the industry, Chidambaram said "Promoters have to bring in additional money and companies have the duty to pay back loans". Commenting on the same, Finance Services Secretary Rajiv Takru said: "We are trying and banks are also trying to make distinction between wilful defaulters and people who are genuinely stressed and who have genuine problems".

The Finance Minister further said recovery has improved in the past one or two months and banks will take more steps to deal with the rising NPAs. Terming stalled projects as worrying, Chidambaram said steps are being taken to ensure impediments are removed and credit flow takes place. As many as 215 projects with an investment of Rs 7 lakh crore are currently stalled and banks have disbursed about Rs 54,000 crore loan towards it, Chidambaram said.


Read more about: chidambaram
Story first published: Monday, March 18, 2013, 17:15 [IST]
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