Public sector Bank has been recapitalized with 2,11,000 Crore of Rupees
We Completely agree with the fact that this was the only solution of saving public sector banks As of today’s date around 15% of Public Bank Sector Credit are either NPA (Non-Performing Assets) or Stress Assets (restructured assets) which soon may be converted to NPA. Given that such a huge amount of loans these banks has given for and they are unable to recover from big Corporates.
PSU banks are sitting on NPAs and stressed assets worth Rs 10 lakh crore, of which almost 70 per cent is from a handful of 50 major corporate behemoths. Government should label these corporates as “willful defaulters”
FM Arun Jaitley has admitted, a congregation of 50 big defaulters, who were given massive loans indiscriminately by PSU banks, form over 80 per cent of the NPAs. Government is not doing anything to recover money from them. People like Vijay Maliya who is just a small fish among all other big defaulters has NPA of Rs. 10,000 Crore and he is living his life in England Stately.
RBI has “identified” the big defaulters, it’s not yet ready to come out in public with the list. They should name them in Public because the loan they have taken from banks comes from the tax payer’s money.
Currently it solves the problem of capital for PSB but it can’t be make keep on making losses once in 10 -15 years there is a recapitalisation and again bank start making losses then it can’t be done. Government has to be proactive and make the required changes in the structure of Public sector banks. And here doesn’t be changing the HR polices but changes like bringing Public sector bank under companies act where they must have an independent board the banking regulation act is pernicious act that has to be killed and government need to privatized some of the PSB. Even when they will announce privation of few banks their prices will go up and at that level they will be able to capitalize more.
I Completely agree with the fact that this was the only solution of saving public sector banks. But The whole reason of the recapitalisation happen is just because more than 50 Big corporate houses has taken loan of thousands and thousands of crores from these Public-Sector banks and they are not repaying their loans. Previous Government and current government both has soft corner to this companies or corporator houses. In last 3 years these loans have been double. Because these are the corporate house who fund these Political Parties Including BJP and Congress both.
Corporate House who have taken loans from these public sectors (basically tax payers money) and not repaying their loans & showing losses in their account (Balance Sheet). Those account which has been declared as NPA, Non Preforming Assets, in simple language NPA are those who take loan from bank and don’t repay their loans.
Our own Indian rich people are not investing their own money into business and Government wants them invest for their they will be offering them loans after their bank recapitalisation. Government is waiting for investment from other countries but no new big investment to India.
After and Unsuccessful experiment done by BJP government last year in November as Demonetization, SME’s (Small Medium Enterprises) are under stress. Government has just worked like killing SME’s (Small Medium Enterprises) through Their experiment such as Demonetization and GST. Government need to strengthen them as they are one of the largest Employment generator and Contribute big amount of money in our economy
Out of 2,11,000 Crore around 76,000 will come from budget and through loans from market. And the amount of money which comes from Budget is the public money (Tax Payers Money)
The best use case of the Bank Capitalisation or bank recapitalization could be that government give money to Public sector banks and banks gives loan to the Big Corporate house so that they invest their money into the business which generate more jobs and build a faster growing economy
Some of these well-known corporate groups should be declared wilful defaulters as there is ample evidence of their having diverted these funds for purposes other than the projects for which the loans were granted. Criminal FIR should be register against them.
Latest data(http://www.business-standard.com/article/markets/npa-mess-rising-stressed-assets-in-telecom-power-worrying-credit-suisse-117061400569_1.html) shows that the total NPAs and stressed assets are in the range of Rs 13 lakh crore to Rs 14 lakh crore. And these are politically, well connected corporate families who dominate election funding. And it worth mentioning here that these are hardly 50 or more Corporate houses such as which has taken loans of around 90% of total amount Rs 13 lakh crore to Rs 14 lakh crore.
Jaitley blamed the previous government for the massive rise in the bad loans. But what Jaitley didn’t told was the fact that The PSU bank’s gross NPAs have doubled in 3 years – from about 4% of net bank credit to nearly 9% now.
In September’17, In Haryana Place Near Bhiwani called Charkhi Dadri. Sarv Haryana Garmin Bank has issued a advertisement on newspaper regarding selling of the land of the people who hasn’t repaid their loans and Advertisement has name of 8 Poor Farmers and the total loan amount of all 8 Farmers sums up around 32 Lakh.
In another similar matter same bank in hodal which is place near Palwal, Notice were given to farmer to repay their loans else on 22 September their land will be sold to other people. In Place like hodal around 80% of the population depends upon farming and Farmers were complaining that due to less raining in the area they are unable to pay their loans. These farmers are not able to pay their child school fee, not able to buy new clothes to wear, not able to celebrate festival with happiness as their live and their family life is at dangerous situation at this condition these banks are stealing their land from the farmers.
BJP Government before coming into power has Promised that they will implement Swaminathan Aayog Report which basically promise to provide 50% Profit to the farmer over to their cost of Farming. But till date Modi Government hasn’t implemented this report which is no turing out to another Jumla of Narendra Modi.
One side Government is selling asset of Poor Farmer due to not pay loan who’s wealth demands upon rains despite 70 Years of Independence. And on other side Government is not ready to name those 50 big defaulters who has taken loans of More than 7,00,000 Crore.
First of All government should take strict action against all the big Corporate defaulter and should start selling their assets to recover all the tax payers money which is converting to NPA’s
The only way to have faster growing GDP is to build a world class system for New and Small Medium enterprises.