New Delhi: The Congress Wednesday launched an all-out attack on the Modi government over the Reserve Bank of India’s (RBI’s) decision to allow ‘compromise settlements’ for wilful defaulters. Senior Congress MP Jairam Ramesh called it a “clean chit to all wilful defaulters and frauds who have run away with public money”, and demanded that the RBI repeal the decision.
Attacking Prime Minister Narendra Modi over the RBI circular, Ramesh said in a statement, “The prime minister has always eagerly bent or changed rules to help his friends in a few large business groups.”
He added, “The Modi government has now provided fraudsters and wilful defaulters such as Nirav Modi, Mehul Choksi and Vijay Mallya a path to rehabilitation. While wealthy financiers of the BJP are given every undeserved convenience, honest Indians struggle to pay their loans. This reveals the true nature of this suit-boot-loot-jhoot sarkar.”
On 8 June, the RBI released a framework for lenders to undertake technical write-offs and compromise settlements in the case of accounts categorised as ‘fraud’ or ‘wilful’ defaulters. In such a settlement, an arrangement is reached between the banks and borrowers, which may or may not include complete recovery of dues. After a 12-month cooling period, borrowers of non-farm credit can be lent money again, according to the RBI’s instructions.
Jairam Ramesh Wednesday asked if the Modi government had pressurised the RBI to take this decision. “Indians have paid a high price for fraud and wilful defaults. Banks write off loans worth ₹10 lakh crore between 2017-18 and 2021-22. The recovery rate for these loans is an abysmal 13 per cent, which means that only Rs 1 is being recovered out of every Rs 8 written off. The top 50 wilful defaulters, a list headed by PM Modi’s friend Mehul Choksi, owe a substantial Rs 92,570 crore (as on 31 March 2022).”
The MP also demanded a clarification as to why the RBI thought these instructions were necessary at this time.
The Congress also said that while the common public have to bear the weight of loans, wilful defaulters, fraudsters are being given a compromise.
Responding to ThePrint’s query during a press conference on the same issue Wednesday, Congress leader Amitabh Dubey said, “The middle class has a lot of EMI burdens but they are not given any waivers, write-offs, discounts, so on and so forth…Secondly, when there are losses to these banks, especially the public sector banks, the taxpayers have to pay at the end of the day when the government does bailouts. The middle class is being denied the opportunity that the willful defaulters and fraudsters are being offered.”
(Edited by Gitanjali Das)
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