Takru talks tough on wilful defaults

Written by fe Bureau | Mumbai | Updated: Aug 31 2013, 08:34am hrs
Wilful defaulters will be dealt with in a serious manner and no consideration will be shown to them, Rajiv Takru, the finance secretary told banks on Friday. In a meeting with public sector lenders in Mumbai, the finance secretary said that banks have been told to cut their gross non-performing assets soon.

Absolutely no consideration will be shown to wilful defaulters...wilful defaulters must be dealt with as firmly, as expeditiously as possible, Takru said talking to reporters. The finance secretary, however, agreed in case of genuine distress caused by environment or factors beyond control, banks will have to do a lot of hand-holding.

There has been a surge in corporate debt restructuring (CDR) cases over the last one year, due to the tough macroeconomic conditions. In FY13 alone, banks had restructured loans worth over R76,000 crore through CDR cell, while in Q1 of the current financial year, loans amounting to over R20,000 crore were approved for restructuring.

During the meeting, Takru and bankers discussed the developments in the implementation of the direct benefit transfer (DBT) scheme. He said there has been tremendous progress in the DBT scheme for liquified petroleum gas (LPG).

As you are aware almost half the country is going to be covered (for DBT in LPG) by January and it is a huge task. They are all confident they will be able to do it, he said.

With respect to capital infusion in public sector banks, Takru said the finance ministry is likely to stay within the prescribed deadline.

An amount of Rs 14,000 crore has been put aside, we have our plan of action ready. A decision will be taken. We have entire matrix worked out of various alternatives. We are on track, he said.