Signalling that the controversy over Raghuram Rajan’s imminent departure as RBI Governor is likely to haunt the Centre in Parliament, CPI(M) General Secretary Sitaram Yechury, has written to Prime Minister Narendra Modi alleging that the government is not taking steps to recover bad loans from the top 100 borrowers.

Citing the Asset Quality Review (AQR) process undertaken by the RBI, Yechury said the ratio of Gross Non-Performing Assets of the top 100 borrowers to the total NPAs of banks is 19.3 per cent as of March 2016, up from 0.7 per cent in March 2015.

Yechury said that while the NPAs have increased 80 per cent in the past one year, there has been no matching effort by the Centre to recover these.

“The total recovery done in 2015-16 by all the public sector lenders was ₹1.28 lakh crore, which included 46 per cent of this amount being written off. The recovery in 2014-15 was already ₹1.27 lakh crore, which gives credence to the view that your government is not serious about recovering public money from these defaulters,” he alleged.

Yechury said that Rajan, having been constantly attacked by BJP MPs and leaders, is stepping down from his post in September while the AQR ends in March next year.

“Your silence, while an important constitutional functionary was being viciously attacked, has led many to believe that you are not interested in completing the bad-loan clean-up exercise. This leaves no other explanation but to conclude that your government actively patronises and promotes crony capitalism,” Yechury said.

What the big fish owe Quoting a Credit Suisse report, Yechury said the top 10 corporates owe a staggering ₹7 lakh crore to public sector banks and financial institutions. “As per a report last year, Adani Group had gross debt of ₹96,031 crore, Essar Group ₹1 lakh crore, GMR Group ₹47,976 crore, GVK Group ₹33,933 crore, Jaypee Group ₹75,163 crore, JSW Group ₹58,171 crore, Lanco Group ₹47,102 crore, Reliance Group ₹1.25 lakh crore, Vedanta Group ₹1.03 lakh crore and Videocon Group ₹45,405 crore,” he noted.

He also questioned the proposal to recapitalise PSBs by using ₹3-4 lakh crore from the RBI’s capital base. He said no plan to recapitalise banks must be executed without an action plan for recovery of unpaid loans. “This is a dangerous idea as it diminishes (the) RBI’s capacity to withstand… economic shocks… By following such a diktat, the central bank would be seen as a government tool. Moreover, by becoming owners of these banks, the RBI will have mixed objectives,” he added.