Banks should spring into action by recovering cash from their top 30 bad loan accounts instead of just monitoring them, according to the All-India Bank Employees Association (AIBEA).
The Association has assessed that the top 30 bad loan accounts in the case of 24 banks add up to ₹70,300 crore.
Speaking on the eve of the 45th anniversary of bank nationalistion, Vishwas Utagi, Vice-President, AIBEA, said, “If banks mount recovery efforts in the case of top 30 accounts and resolve cases which have piled up in the corporate debt restructuring cell, then the Government need not recapitalise State-owned banks.
“Moreover, these banks will not be hard-pressed to go to the public by issuing shares.”
As at March-end 2014, the CDR cell was trying to resolve 280 corporate accounts aggregating ₹2,42,259 crore.
The Association wants huge bad loans due from large companies recovered by taking strong action against the defaulters.
“The list of such bank loan defaulters should be published by the RBI. Wilful default of bank loans should be made a criminal offence,” said the Association in a statement.
Though the Budget announced the setting up of 6 more Debt Recovery Tribunals, Utagi said this is inadequate. Thousands of cases of bank loan defaults are already pending and unless an enlarged and effective mechanism is built up, banks would not be able to recover their dues.
Hence, more DRTs and Fast Track DRTs have to be set-up to deal with high volume loan defaults so that banks will be able to recover the loans.