Madam Speaker, I thank you
very much. The proposed Amendment Bill is mainly intended to amend two Acts,
that is, the SARFAESI Act of 2002 and the DRT Act 1993 along with two other
Acts – the Stamp Act as well as the Depositories Act of 1996. The main
objective of the proposed Bill is to improve the ease of doing business so as
to facilitate investment leading to higher economic growth and development in
our country. I fully support the Government as far as the intention of
the Bill is concerned, that is, NPA which is accumulating like anything in the
country has to be checked in a strict manner. That is the need of the hour. I
fully agree with that position. The intention of the Bill is to address the
issue of the stressed assets. Most of the hon. Members140
have already pointed out about the present situation in our country regarding
the stressed assets. The present situation160 is that we have
Rs. 8 lakh crore of stressed assets. That means, 5.6 per cent of the Indian GDP
is the stressed asset. It is an alarming fiscal situation in our country. The
latest forecast shows that the stressed assets of Indian banks would grow 11
per cent to 12 per cent in the financial year 2016-17. According to the Reserve
Bank of India ,
10.9 per cent of all loans are stressed. It would cross Rs.8 lakh crore by
March. The public sector banks have already written off Rs.1.14 lakh
crore as bad debts or debts which are not recoverable.
The question which I would
like to pose before the hon. Finance Minister is as to who are the280
real defaulters contributing to these huge non-performing assets in our
country. Kindly see that bad loans in the banks are increasing day by day. The
statistics which we have taken from the Library shows that as on 31st
March, 2002, the320 gross NPAs in terms of rupees in public
sector banks alone is Rs.54,673 crore. When we come to 2016, it has come to
Rs.5,39,995 crore as NPAs of the public sector banks alone. That means, there
has been a ten times increase within a span of 14 years. It means, we are not
able to check NPAs. This is in respect of the public sector banks alone. If we
calculate this in terms of private banks, it will approximately cross Rs. 10
lakh crore. So, where is the country going with this non-performing asset? Why
is this?420 Who is to answer for this? The hon. Finance
Minister recently stated that there are 7,000 wilful defaulters. That will come
around Rs.76,000 crore as the amount of wilful defaulters. Wilful defaulters
and other defaulters are entirely different. Out of the 7000 wilful defaulters,
5,601 wilful defaulters are from the public sector banks. That will come around
Rs.58,000 crore. Here lies the480 main question. My question
to the hon. Minister is that wilful defaulters should be treated as criminal
offenders. It is because they are cheating the country. They are having the
money but they are not paying it. ‘Wilful default’ means defrauding the bank,
misusing the money, abusing the loan and diverting the money. These kinds of
transactions are called as ‘wilful default’. My point is that instead of
considering it as a civil liability or a civil dispute, wilful defaulter560
should be treated as criminal offenders and it should be treated as a criminal
offence. That is the first point which I would like to make regarding this
Bill.
Coming to the Act, the point
that has been made is that there are two Acts that is, the SARFAESI Act as well
as the DRT Act of 1993. Both these Acts have already been discussed. The point
is that even after the legislation of these two Acts we are not640
able to check the increase in non-performing assets and we are not
able to recover bad loans so far. I now
come to the statistics of the performance of Debts Recovery Tribunals
and Debts Recovery Appellate Tribunals. You may kindly see the
percentage of realisation of amounts through DRT. In the year 2010-11 the money
which was recovered compared to700 the number of cases
referred and the amount of rupees in bad debts was 27 per cent; in 2011-12 it
was 17 per cent; in 2012-13 it was 14 per cent; in 2013-14 it was 10 per cent;
and in 2014-15 it was 14 per cent. That means, recovery of bad loans through
the Debts Recovery Tribunals is declining. Statistics of realisation of loans
through DRTs is not satisfactory. The functioning of DRTs and DRATs have to be
reviewed. That is the request I would like to make before the hon. Minister.
Madam, by virtue of the 993 Act,800 the banks and financial
institutions are having the easiest remedy to recover their loans. However,
there are more than 10 lakh cases that have already been transferred to DRTs
and Appeals Commission. What was the provision? Actually the time for840
disposal of cases before the DRT should be a maximum of 180 days. However, now
years are being taken to dispose of the cases.
The amendment seeks
expeditious disposal of recovery applications and electronic filing of
applications. All these things are there. The point which I would like to
highlight is that legislations are not sufficient to meet the situation. The
hon. Finance Minister with his legal background is pushing through many
legislations so as to have fiscal reforms in our country. But unfortunately the
results as far as recovery of loans and checking of NPAs are not up to the
mark. Mere legislations and new mechanisms enunciated out of legislations are
not sufficient. The Government should have the will power,960
especially political will, to control and check NPAs, especially those created
by the rich and the corporate entities.980 It is the poor
students who are being punished. The SARFAESI Act is being implemented not
against the rich people. It is being applied against farmers, students, MSM E
loans, housing loans etc. The SARFAESI Act as well as the DRT Act have to be
implemented in a stringent manner. They should be applied against the rich and
the corporate entities. I would like to know from the hon. Minister
whether a list of wilful defaulters will be published and whether he will
have the will power to control and check corruption as also contain NPAs by
addressing them.
This amendment Bill is very
important considering the grim situation of the banking sector in the country
today. The gross bad loans of commercial banks increased to 8.5 per cent of
total advances by March 2017 from 7.6 per cent in March 2016 according1120
to the Reserve Bank of India ’s
Financial Stability Report released recently. The gross bad loans of public sector
banks increased to 9.6 per cent as of March 2016 from about six per cent a year
earlier. The gross non-performing assets to total advances of public sector
banks as on 31.03.2016 was Rs. 4,76,816 crore that is 9.32 per cent. The All
India Bank Employees Association has announced the names of 5,600 wilful
defaulters who collectively owe public and private sector banks over Rs. 58,790
crore as on March 2016. The State Bank of India
was defrauded by more than 1,030 borrowers totalling Rs. 12,091 crore. The
higher rate of NPAs has weakened the profitability and liquidity position of
the banks, necessitating the recent recapitalisation of public sector banks to
the tune of Rs 22,915 crore. It is the public funds1260 or
the taxpayers’ money being provided year after year to the ailing banks
without any commendable changes in the governance1280 of
these banks. The Reserve Bank of India
has taken some measures since January 2014 after Shri Raghuram Rajan
became the Governor of RBI for recovery of bad loans, like restructuring bad
debts, boosting the Asset Reconstruction Companies etc. But these measures have
not served their intended purposes. In such a situation, I hope the present
Bill will help in expeditious recovery of bad loans and strengthen the ailing public
sector banks and financial institutions in the country.
The letting of loans and their
recovery are equally important. This Amendment is mainly for enabling the
system of recovery of loans, especially of bad debts. Unfortunately for letting
of loans, our State-run banks are more eager to give loans to the corporate
companies;1400 and they are not much eager to recover bad
debts from the corporate companies. On the other hand, the banks are not that
much eager to advance loans to the poorer sections especially, educational
loans, MSME loans and farm loans.1440 At the same time, they
are very much interested in recovering these loans even by foreclosing the
loans advanced to students, farmers and others. This is unfortunate. Coming to
the Bill, the Amendment to the SARFAESI Act, 2002 and the DRT Act, 1993, in the
SARFAESI Act, more thrust is given to asset reconstruction companies. The
practice is in place but the system is being misused. In educational loans, as
we are aware, the State Bank of India
has sold its loans to Reliance which is an asset reconstruction company
and Reliance is taking steps to recover loans from poor1540
students who are not in a position to find employment after their education.
This is happening in my constituency too. The people are coming to us
and complaining about atrocities meted out by these asset reconstruction
companies.1577
