Financial Daily from THE HINDU group of publications
Tuesday, Sep 17, 2002
Financial Daily from THE HINDU group of publications Tuesday, Sep 17, 2002 |
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Industry & Economy
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SSI Money & Banking - Non-Performing Assets Small units' concern over NPA ordinance Our Bureau
NEW DELHI, Sept. 16 LAGHU Udyog Bharati has expressed reservations about the implementation of the Ordinance for Debt Recovery issued by the Union Government. Dr S.S. Aggarwal, National President, Laghu Udyog Bharati, said that the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance was welcome as it sought to curb the NPAs of banks, but it should not be implemented without safeguards against its misuse, particularly, in relation to the small-scale sector. The Ordinance made no efforts to distinguish between wilful defaulters and those who default under adverse conditions, he said in a statement here. Lending institutions have been given immense powers to recover even small loans from the small-scale units. "Misuse of such powers by banks and institutions can cause great hardship to small loanees. The small-scale sector should not be treated on par with large-scale industries whose loan defaults run into thousands of crores," he added. Dr Aggarwal suggested that in the case of small units where the lending institutions have recovered their principal amount, the rest of the debt should be written off.
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