Sitharaman rebuts Rahul charge: No loan is waived off

Finance Minister Nirmala Sitharaman has rebutted Congress leaders Rahul Gandhi and Randeep Singh Surjewala's allegations regarding "wilful defaulters, bad loans and write-offs", and stated that they have "attempted to mislead people in a brazen manner".

On Tuesday, Gandhi attacked the Bharatiya Janata Party after Reserve Bank of India released a list of 50 wilful defaulters accused of cheating banks whose loans were written off.

"Rahul Gandhi, MP (LS), and Randeep Singh Surjewala, spokesperson of Congress, have attempted to mislead people in a brazen manner. Typical to Congress, they resort to sensationalising facts by taking them out of context," Sitharaman tweeted.

In a series of tweets, Sitharaman responded to the issues raised by them.

"Today's attempt of Congress leaders is to mislead on wilful defaulters, bad loans and write-offs. Between 2009-10 and 2013-14, scheduled commercial banks had written off Rs 1,45,226.00 crore. Wished Rahul Gandhi consulted Dr Manmohan Singh on what this writing-off was about," the finance minister said.

She also said that provisions are made for NPAs as per the four-year provisioning cycle laid down by the RBI. "Upon full provisioning being done banks write-off the fully provided NPA but continue to pursue recovery against the borrower. No loan is waived off," she wrote.

"Those defaulters, who do not repay despite having the capacity to pay, divert or siphon-off funds, or dispose of secured assets without bank's permission are categorised as wilful defaulters. They are those well-connected promoters who benefitted from UPA's 'phone banking'," Sitharaman said.

Taking to Twitter on Tuesday, Gandhi alleged that the BJP was hiding the names of defaulters as it included "friends of the government".

"I had asked a simple question in Parliament -- tell me the names of 50 bank defaulters. Finance Minister refused to answer. Now RBI has put names of Nirav Modi, Mehul Choksi and other BJP friends in the list. This is why they hid the truth from Parliament," Gandhi tweeted in Hindi along with a video.

Replying to the allegations, Sitharaman also recalled the "words of Raghuram Rajan", former RBI governor.

"A large number of bad loans originated in the period 2006-2008...Too many loans were made to well-connected promoters who have a history of defaulting on their loans...Public sector bankers continued financing promoters even while private sector banks were getting out. RBI could have raised more flags about the quality of lending..." Raghuram Rajan (said)... From 2015, PSBs were asked by GoI to check all NPAs >50 crore for wilful default," Sitharaman wrote.

The finance minister also mentioned in detail the cases of Nirav Modi, Mehul Choksi and Vijay Mallya.

"Nirav Modi case: Immovable and movable properties worth more than Rs 2,387 crore attached/seized. (Attachment Rs 1,898 crore and seizure Rs 489.75 crore). This includes foreign attachments of Rs 961.47 crore. Auction of luxury items for Rs 53.45 crore. He is in prison in the UK," she tweeted.

In the Mehul Choksi case, Sitharaman stated that attachments of Rs 1,936.95 crore including foreign attachment of Rs 67.9 crore have been done and seizures of Rs 597.75 crore.

"Red Notice issued. Extradition request sent to Antigua. Hearing for declaration of Mehul Choksi as Fugitive Offender is in progress," she wrote.

In Vijay Mallya's case, Sitharaman said, "Total value at the time of attachment was Rs 8,040 crore and of seizure was Rs 1,693 crore. Value of shares at the time of seizure was Rs 1,693 crore. Declared fugitive offender. On extradition request by GoI, UK High Court, has also ruled for extradition."

Sitharaman stated that it was the Prime Minister Narendra Modi-led government which was pursuing these wilful defaulters.

"9,967 recovery suits, 3,515 FIRs, invoking Fugitive Amendment Act in cases are on now. Total value of attachment and seizures in the cases of Nirav Modi, Mehul Choksi and Vijay Mallya: Rs 18,332.7 crore," she said.

"Bank-wise details of aggregate funded amount outstanding and amount technically/prudentially written off pertaining to top fifty wilful defaulters was provided as an annex to the answer to Lok Sabha starred question *305 of Rahul Gandhi on 16.3.2020," the finance minister added.

Sitharaman also mentioned that a list of "borrowers flagged as wilful defaulter by Public Sector Banks under CRILIC reporting as on September 30, 2019 (for borrowers with exposure of Rs 5 crore and above, global operations) was provided", on November 18, 2019, in the Lok Sabha.

The finance minister stated that the Congress and Gandhi should introspect why they fail to play a constructive role in cleaning up the system.

"Neither while in power, nor while in the opposition has the Congress shown any commitment or inclination to stop corruption and cronyism," Sitharaman further stated.