On 16th February, country’s apex court asked the Reserve Bank of India (R.B.I) to provide names of all those defaulters who owe more than Rs 500 crore to public sector banks.
This directive of court comes in the backdrop of increasing Non Performing Assets (N.P.A) of Banks in India. NPA are loans that have gone bad on which even the principal amount may not have been returned.
This issue of increasing bad loans, especially by big defaulters had RBI governor Raghuram Rajan saying “If you flaunt your birthday bashes even while owing the system a lot of money, it does seem to suggest to the public that you don’t care. I think that is the wrong message to send. If you are in trouble, you should be cutting down your expenses”.
It is true that certain big business houses like Kingfisher owe a lot of money to banks. 17 lenders, over Rs 7,500 crore exposure and 3 years later, Mallya continues to live his flamboyant lifestyle. The wilful defaulter throws big birthday bashes in Goa and organises calendar events each year. Recently, he bought a cricket team in the Caribbean Cricket League.
A 29 lakh debt and a series of bank repayment notices took Datatery Popat Ghadwaje’s life in Umbrale village of Maharashtra in 2015. In the last 20 years, nearly 300,000 farmers have ended their lives. Statistically, 41 farmers commit suicide every day.
It is disheartening to see that while there are defaulters like Mallya living a life of luxury and flaunting their money, the starving Indian farmers are committing suicide under the burden of meagre amounts owned to local moneylenders.
Furthermore, due to the poor state of Bank’s balance sheets, the lending power of banks has seen a major decline. This has led to a credit crunch for many start-ups that are major employers for the job craving youth of today’s India. Recovery of assets from big business houses is a must to restart the fund flow to the emerging Indian economy.
Thus, the directive given by the Supreme Court is the right dose required at this junction in order to retrieve the money from those who have the capability to return. Supreme Court’s intervention in the infamous Sahara case helped investors recover a huge chunk of money which proved that it is absolutely necessary to have a transient accountability of hard earned money.
If these big fish are not made liable for their acts, it will create frustration in the society. A small farmer starts questioning the system for the precarious life he lives, especially when the rich of the society live in affluence despite being at fault. This is a utopian recipe for social upheaval that requires intervention from the highest court of the country. If not tackled timely, the Indian dream of making the country one of the developed nations in the world will remain as is- a dream.