Views and opinions about NPA within the political spectrum

As of June 2017, the total amount of Gross Non-Performing Assets (NPAs) for public and private sector banks is around Rs. 6 lakh crore. The NPA figures along with total debt for each of the 49 public and private sector banks were shared by the Ministry of Finance in response to a Parliament question. There are varying views about NPA among people and within the political spectrum.

The Delhi CM mentions the Vijay Mallya case and criticizes the government for the following: “on the one hand, (the government) stops banks from recovering the money from them (big businessmen) and on the other hand, privatizes the banks by selling off their shares.” This will ensure that big businessmen “like Vijay Mallya will get control of the banks who looted the bank,” he claims.

The Delhi Cheif Minister quoted demonitisation as a way to write off the Non Performing Assets(NPA). This is independent India’s biggest scam – a scam worth Rs 8 lakh crore. “Public sector banks have been giving huge loans to all of India’s large millionaires and industrialists. These loans are to the tune of Rs 8-8.5 lakh crores. However, these loans have now become non-performing assets (NPAs). Recently the CAG said that of these NPAs, a large chunk of money has been transferred abroad and the rest of it has been fraudulently siphoned off. This is Rs 8 lakh crores of public money, that is never coming back. The Modi Government has already waived off loans worth Rs 1,14,000, and now wants to waive off the Rs 7,00,000 crore left. This entire demonetisation exercise has been to ensure that people deposit all of their money into banks, which will make it possible for these loans to be waived off.”

The government is going to announce a policy to push for the quick settlement of the non-performing assets (NPA) at banks in a ‘couple of days’, said Finance Minister Arun Jaitley at CNBC-TV18’s IBLA Awards.

The decision will be taken in tandem with the Reserve Bank of India.

Jaitley refused to reveal whether the policy would be along the lines of a ‘bad bank’ or super asset resconstruction companies (ARCs).

BJP is seen as a party which has written loans of big corporate while not doing the same to the farmers. Yogendra yadav argues that why can’t we write loans of farmers in the same fashion questioning the inetntion of the present government.

As dicussed over different platforms, we can conclude that the need of the hour to tackle NPAs is some urgent remedial measures. This should include:

Technology and data analytics to identify the early warning signals.
Mechanism to identify the hidden NPAs.
Development of internal skills for credit assessment.
Forensic audits to understand the intent of the borrower