A parliamentary consultative committee on non-performing assets recommended that the government make public the list of people whose loans were written off by state-run banks. In a meeting with finance minister ArunJaitley, members said the government should increase transparency in the system, and ensure strict action against wilful defaulters to set a precedent.

The committee, which is attached to the finance ministry, held its second meeting on Wednesday. Some members suggested setting up a body to achieve a recovery process for loans paid to big corporate houses.

“The Finance Minister said that wherever it was observed that action taken by the banks against sponsors for recovery of defaulted loans is insufficient, the government has advised the banks to take action against sponsors in the event of default by borrowers,” the finance ministry said, in a statement.

ArunJaitley is reported to have told the committee that the Insolvency and Bankruptcy Code has been approved by a joint parliamentary committee, and will be tabled in the ongoing Budget Session of Parliament. He added that both the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act and Debt Recovery Tribunal (DRT)Act have also been amended to make recovery of loans more efficient.

Recently, Reserve Bank of India governor RaghuramRajan said the names of wilful defaulters should not be disclosed to the public as it will adversely affect risk taking, and in turn, affect the economy. He added that at times, defaulting on loans may be the fault of cyclical changes in the economy.

 

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