Finance Minister Arun Jaitley denies waiving off corporate loans
New Delhi: Union Finance Minister Arun Jaitley said on Tuesday that the Narendra Modi-government has not written off any corporate loans and such assumptions were just 'misconceptions'.
"Let me clarify that neither the government nor the banks wrote off any loans," Jaitley told the Rajya Sabha in response to a question that the government had reportedly written off corporate loans of Rs 55,000 crore (almost $9 billion).
"Only when a loan remains non-performing after four years, and the bank feels that the chances of its recovery are slim, it changes the category of the loan. But the debtor's responsibility is to pay back remains. The bank does this provisioning to get relief in the Income Tax," he said.
Replying to supplementaries, the Finance Minister said that in the asset quality review undertaken by the Reserve Bank of India (RBI) in 2015, it found that in the non-performing loans there were cases where the banks did aggressive lending, or did not do proper risk assessment and there were also cases of wilful default.
"Every such (non-performing) account has a different story. So in these cases whatever action under the law can be taken, is being taken. Where the criminal liability can be fixed, it is being fixed. And where business losses are the reason, the recovery process or the Insolvency procedure are on," he said.
However, Jaitley avoided a direct answer to a question by Congress leader and former Finance Minister P. Chidambaram who demanded to know as to how many loans given after April 1, 2014 have turned non-performing assets.