Supreme Court won’t help banks recover NPAs

The Supreme Court (SC) has declined to crack the whip to recover the over Rs81,000 crore lost by banks to defaulting borrowers.
It, however, said the non-performing assets (NPA), which form 2.5% of the gross advances issued by banks, could be recovered by the serious fraud investigation office (SFIO), an arm of the company affairs ministry that recently probed the Satyam and Madhu Koda scams.

Common Cause, a public spirited organisation founded by the late HD Shourie, father of BJP leader and author Arun Shourie, had moved SC in 1998 seeking directions for recovery of NPAs.

Disposing of the petition, a bench of justices JM Panchal and AK Patnaik asked the government to let SFIO help reduce NPAs.

“We hope the Centre makes SFIO an independent agency to deal with NPAs and reduce it,” the judges said.

The court also said there were quite a few laws to deal with NPAs in the country.

“Whether such laws are implemented efficiently and effectively is for the legislature and the Centre to decide. Courts cannot interfere in it,” the bench said.

The government set up SFIO in 1993 with the sole objective to investigate allegations of plundering of public money by corporate houses or men in power.

According to minister of state for finance Namo Narain Meena, the gross NPA of public sector banks was Rs57,301 crore and that of private lenders Rs17,384 crore.

It is learnt that in the first quarter of the current financial year, listed banks saw gross NPAs grow by Rs5,100 crore, with SBI alone seeing an addition of Rs1,300 crore.

Expressing concern at the misuse of law by defaulters, Supreme Court had held last week that borrowers were duty-bound to repay debt and any lapse would invite serious action.