Defaulters cannot escape: Sinha

NEW DELHI, JULY 8. The Finance Minister, Mr. Yashwant Sinha, today said the Government would move ``definitively and mercilessly'' against wilful defaulters of bank loans. The action might result in imprisonment and attachment of property.

``No case of wilful default will escape the notice and I will hold bank Chairmen personally responsible for any delay in filing a suit,'' Mr. Sinha said emphasising the Government's commitment to recover the Rs. 52,000-crore non-performing assets of the public sector banks.

Asserting that it had now become increasingly difficult to default on bank loans, Mr. Sinha told a Doordarshan interview that he had fixed a deadline for the public sector banks to take action on bad debts.

``We will sit and review the situation after the deadline (of October 1).'' ``We are going to make things difficult (for the wilful defaulters). New provisions have been made in the debt recovery tribunal,'' Mr. Sinha said.

The Government would also set up an agency for exchange of information which would help in preventing a defaulter from seeking fresh loans from other banks.

The Reserve Bank would soon formulate a ``non- discriminatory and non-discretionary'' arrangement for recovery of bad debts.

A bad debt of Rs.100 might have become Rs. 500 today and still recoverable, but ``when it becomes Rs. 1000 tomorrow'', it might become impossible to recover, Mr. Sinha said. In such cases, bank officers would be held responsible for not acting in time.

Referring to weak banks, Mr. Sinha said the Government would soon set up a Financial Reconstruction Authority to ensure that such banks got necessary helpline.

As a first step to tone up the working of the public sector banks, the Government was in the process of selecting the right chairmen.

ERC report soon

The Expenditure Reforms Commission (ERC), set up to downsize the government expenditure and cut non-Plan expenditure, would soon submit its report, Mr. Sinha said.

The ERC, headed by the former Finance Secretary, Mr. K.P. Geethakrishnan, would submit its reports in phases during the year.

- PTI

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