As the controversy arose over SBI reportedly writing off loans worth Rs 7,000 crores including that of Vijay Mallya promoted Kingfisher Airlines, the government and the banking authorities reiterated that there was no loan waiver given and liability on the borrowers still remains.
Finance Minister Arun Jaitley asked the opposition to not go by the literal meaning of writing off loans.
“So there is a little bit of malapropism involved in this. Don’t go by literal meaning write-off. Write-off does not mean loan waiver. Loan still remains. You still continue to pursue,” he said.
This was said by Jaitley when he was intervening in the debate in the Upper House of Parliament when considering the demonetization action.
Jaitley was replying to CPM leader Sitaram Yechury who referred to a newspaper report which said that the banks had waived off the Rs 1,200 crore of Kingfisher Airlines.
This issue was brought up a number of members in the Rajya Sabha along with Congress leader Anand Sharma. Jaitley said: “It (write-off) does not mean that the loan ceases to be a loan. We will still chase the loan. The entry in the book changes that is from being performing assets, it become a non-performing (asset).”
When specifically talking about the loan, Jaitley said that the loan was restructured by the previous government, when they were in power. “This is the only loan for which second restructure was wanted by that government. So, we inherited a terrible legacy. But only in the accounting book, the performing assets becomes non-performing that’s all. Otherwise the liability to pay and right to recover still remains,” he said.
Even the SBI chairman was quick to reword the statement which said that SBI had write-off of 63 wilful defaulters saying that they have been clubbed under a different head and efforts are on to recover loans from such defaulters.
SBI, one of the main members of the 17 consortium of banks has taken physical possession of many properties including Goa’s plush Kingfisher Villa.
“These are not write offs. They are old entries done over time. We have fully provided for these loans so they are put into an account called Accounts Under Collection. There is a very robust process for following up all these loans for recovery including monthly review by management and quarterly review by board. No let off of borrowers happened and all processes are focuses for full recovery. The words “write-off” are technical terms and used in the layman’s way of understanding these words is completely misleading,” SBI Chairman Arundhati Bhattacharya said.