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Government, banks tighten noose on top 50 loan defaulters

Saturday, 16 August 2014 - 5:35am IST | Place: New Delhi | Agency: dna

Top 50 non-performing asset (NPAs) cases in the banking sector are being closely monitored by both finance ministry and the banks that have been defaulted by the corporate houses such as Kingfisher Airlines.

The finance ministry has indicated that in case of evidence of fraud, criminal action will be initiated against such debtors.

Reacting on dna report on the alleged diversion of bank funds by Kingfisher Airlines mentioned by the SBI's forensic audit, banking secretary Gurdial Singh Sandhu said, "Where there is evidence of fraud, there will be criminal action against them. After they are declared wilful defaulters, no bank or financial institution will ever give them any assistance."

"Where money does not come naturally, or where we see that the money has gone somewhere else, we will declare them as wilful defaulters in that case," Sandhu said.

"We are reviewing the situation, big NPAs and loans are being reviewed. Whatever action needs to be taken for their speedy recovery so that banks get their money back, is being taken. Banks are also working in this direction. They have formed committees at their own level. Whatever legal procedures need to be adopted, either through DRT (debt recovery tribunal), will be initiated. It is a very important area on which all the banks are working so that the recovery is better," Sandhu said.

"We have made a list of the 50 big cases so that we can monitor them. Banks are also monitoring, and we are monitoring at the government level," he said.

The Congress party, in whose last five-year term total bad debt in the banking system doubled, too stressed on the need to investigate the matter.

"It is mandatory to use the loan for the same reason for which it is taken. If you give one reason and then spend it for another then you don't need a judge as even a common man can say that it is wrong to do so," said senior Congress leader Ambika Soni.

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