Opposition members in the Rajya Sabha on Wednesday criticised the Central government, alleging that it had written off loans worth crores of rupees owed by wilful defaulters who have left the country, while banks continue to suffer from the burden of non-performing assets (NPAs).
During a debate on the Banking Laws (Amendment) Bill, 2024, Gujarat Congress president and MP Shaktisinh Gohil claimed that official data showed the government had written off Rs 87,000 crore owed by 50 wilful defaulters until 2024.
He highlighted that individuals such as Mehul Chokshi and Rishi Agarwal were among those defaulters.
“The government has written off loans for those who looted the country and fled abroad. However, when small traders and farmers default on loans, their assets are auctioned,” Gohil said.
Echoing similar sentiments, Saket Gokhale of the Trinamool Congress (TMC) remarked that the government itself acknowledged a downturn in economic consumption. He argued that people were primarily taking loans to service existing debts rather than to make new purchases.
“Indian banks are bearing the burden of Rs 10 lakh crore in NPAs over the last five years. This crisis was not caused by ordinary citizens but by a small group of 10 to 15 individuals who exploited the system and absconded,” Gokhale stated.
He further criticised the government’s strategy of addressing the NPA crisis, suggesting that banks were instructed to write off bad debts to present healthier balance sheets.
“These loans are not repaid; they are merely removed from the records. The actual recovery of these funds remains unresolved,” Gokhale added.
Responding to the accusations, Bharatiya Janata Party (BJP) leader Arun Singh attributed the NPA crisis to the previous United Progressive Alliance (UPA) government, alleging that loans were disbursed without proper procedures.
Singh praised Prime Minister Narendra Modi’s decision in 2015 to conduct an asset quality review to transparently identify and disclose NPAs.
“Banks have since focused on recognising NPAs, resolving them, and implementing reforms. When loans are written off as bad debts, recovery efforts still continue. Writing off loans does not mean waiving them,” Singh explained.
He pointed out that the implementation of the Insolvency and Bankruptcy Code in 2016 had resulted in the recovery of Rs 3.4 lakh crore, amounting to 122.81% of the fair value of assets.
In the course of the debate, KRN Rajeshkumar of the Dravida Munnetra Kazhagam (DMK) expressed concerns over the additional authority granted to banks for determining auditor remuneration, suggesting it could lead to favouritism and inflated payments.
Additionally, Aam Aadmi Party (AAP) member Raghav Chadha criticised the poor customer service at public sector banks, stating that even routine tasks like updating a passbook remain challenging for customers.
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