Chidambaram for loans recovery from rich promoters

Warning comes in the backdrop of several cos unable to repay bank loans

Published: 19th March 2013 08:33 AM  |   Last Updated: 19th March 2013 08:33 AM   |  A+A-

Union Finance Minister P Chidambaram urged banks to recover loans from wealthy promoters of sick companies. “We cannot have an affluent promoter and a sick company. Promoters must bring in money... We wish banks take firm steps to recover NPAs,” Chidambaram said on Monday after his meeting with PSU bank bosses and heads of financial institutions.

Chidambaram sent this strict warning even as companies such as Vijay Mallya-owned Kingfisher Airlines have defaulted on replaying bank loan. Gross NPAs of government banks have increased from `71,080 crore as on March, 2011 to `1.55 lakh crore as on December, 2012. About 53.68 per cent of the gross NPAs belong to corporate accounts, of which 172 corporate accounts are NPAs worth more than `100 crore and total amount is `37, 194 crore.

Even though recoveries of loans have improved in the last couple of months, Chidambaram urged the banks to take firm steps even to the extent of bringing in the money from the affluent promoters. The FM also expressed concern over the number of delayed projects. “As many as 215 projects with an investment of `7 lakh crore are currently stalled and banks have disbursed about `54,000 crore loan towards it,” he said adding that the government has zeroed in on the primary reasons that have caused the delay in core projects especially in road and power.

“There are 126 new projects for which the outlay is `3.55 lakh crore and amount sanctioned by banks against these was `43,000 crore. The main reasons for delays are coal linkage, environment nod, land acquisition,” Chidambaram said and added that the Finance Ministry and RBI  were looking into money laundering charges against three banks.

“Secretary, department of financial services is looking at it closely. RBI is looking at it closely. They (banks) themselves have instituted enquiries. Let’s give them a little time to come up with the report of the enquiry,” Chidambaram said.

The FM further said that banks would receive `14,000 crore as additional capital from the government in the next financial year.

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