|
New
Delhi: Finance
Minister Yashwant Sinha says the proposed legislation
to help banks recover the dues from defaulters will strengthen
the rights of creditors and will lead to a improvement
in bond prices, the share prices of banks and create a
market for securitised assets, besides providing an incentive
to recover sticky assets and improve the financial health
of banks.
The proposed asset
reconstruction company (ARC) will be set up in June 2002. It will
have the specialisation to handle bad loans. The government has
also directed banks to be merciless with wilful loan defaulters.
They have also been told to opt for onetime settlements with
borrowers to recover their dues. "We cannot afford to show
any mercy to wilful defaulters. Chase them, bring them to Debt
Recovery Tribunals (DRTs) and handle them as strongly as
possible," says Sinha.
Several banks have filed
suits against defaulters in DRTs. Unit Trust of India has also
approached DRTs against a few industrial houses to recover dues.
Sinha
says banks should take up onetime settlement for small borrowers
while clamping down on wilful defaulters. "They should also
offer higher credit to small borrowers, especially
first-generation entrepreneurs. In this respect, they should move
out from the charms of the top 500 corporates and go out to those
who need credit the most."
|
