BackGive more time to firms with genuine problems to service loans: Takru
Wilful defaulters or promoters who do not pay back despite having the money should be treated sternly: Rajiv Takru
Premium
Mumbai: Firms not repaying bank loans because of problems such as delays in clearing projects should be given more time to pay back than wilful defaulters, financial services secretary Rajiv Takru said on Wednesday.
Bad loans in infrastructure projects are often due to problems beyond the control of companies, Takru said. “They should be treated as a separate category."
However, wilful defaulters or promoters who do not pay back despite having the money should be treated with an iron hand, Takru said.
Takru was speaking at a pension summit organised by industry lobby Confederation of Indian Industry in Mumbai.
In recent years, some government-run banks such as State Bank of India had intensified efforts to recover money from wilful defaulters.
Gross bad loans of 40 listed banks grew 36.95% to ₹ 2.29 trillion in the three months ended 30 September from ₹ 1.67 trillion a year ago. A large portion of these have been lent to infrastructure companies and does not include loans that have been restructured.
Indian banks have been struggling to fund infrastructure projects that take a long time to complete as most of their deposits are short term, creating a mismatch on their balance sheets.
Noting that pension funds are ideal long-term funds to support infrastructure projects in the country, Takru said fund managers should reach out to private firms rather than limiting their operations to government employees, which is in any case mandated by law.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
