In an attempt at focusing on Debt recovery, Arun Jaitley, Finance Minister on Saturday emphasized on faster resolution of debt recovery cases and said that every case that litigant manage to delay hurts the larger investment environment of the country.
He said, “Because if money of banks are blocked by some defaulters it prevents the bank from funding others who otherwise could utilise this investment for fruitful and productive purpose.” The government has introduced amendments in the debt recovery tribunal related laws and the securitisation of financial assets law to help in the case.
In a subtle reference to loan recovery cases like that of Vijay Mallya, against whom banks are trying to recover about Rs9,091 crore, Jaitley said that these cases ought not to be treated like usual loan recovery cases as these recoveries are not a usual judicial or quasi judicial procedure when endless opportunities have to be granted to people to defend their case.
“Because if natural justice is carried on to unnatural extent the litigation will become unending and therefore efficiency has to be introduced into the recovery procedure as far as the defaulting parties are concerned,” he said that if money of banks are blocked by some defaulters it prevents the bank from funding others who otherwise could utilise this investment for fruitful and productive purpose. “The more we’re able to delay them, the more we’re preventing that recovery, the more we’re preventing recovery, the more we’re preventing that investment into more fruitful hands where it can be used for better economic activity,” he noted.
Jaitley said that Indian private sector needs to expand in a big way. It needs to invest and thats when all engines of economy will start firing.
“You need banks to ensure flow of credit and support the private sector in order to expand their investments. Therefore the role of the banks in supporting growth particularly as far domestic private sector is concerned is extremely significant,” he said pointing out that bank credit has to pick up.
The finance minister said that in the last few years the banks have been themselves caught in a difficult and challenging situation. He was speaking at a debt recovery seminar in Gurugram, Haryana.