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ASSOCHAM asks banks not to get swayed away by shrill in Mallya case

ASSOCHAM asks banks not to get swayed away by shrill in Mallya case

New Delhi : Impressing upon the banks not to get swayed away by the shrill of public discourse against the purported willful defaulters, ASSOCHAM today said that offer made by liquor baron Vijaya Mallya should be considered carefully before rejecting it, because his offer does convey his ‘intention’ to repay the loans taken from the public sector lenders.

“With so much shrill on the wilful defaulters, the banks and their principal shareholder, the Government of India, should take a dispassionate view of the case rather than being influenced by the media reports which at times get exaggerated in the ‘right-or-wrong’ debate,” ASSOCHAM secretary general D.S Rawat said in a statement.

He said, the main concerns for the banks’ consortium should be recovery of its assets which have become NPAs and all genuine efforts must be made towards that end.

“Whether Mallya has done something right or wrong should be left to the law enforcement agencies and the courts. The banks must evaluate with open mind what offer is on the table. Even if Rs 4,000 crore, as reported in the media, needs to be revised, the banks should be open to negotiations irrespective of the fact whether the borrower is sitting in Delhi or Dubai, Mumbai or London,” the ASSOCHAM secretary general said. “Get your money back and cut your losses, if they occur.”

He said the real test should be as per the definition of the Reserve Bank of India of a wilful defaulter.

“The default to be categorised as wilful must be intentional, deliberate and calculated,” the chamber quoted the RBI Master Circular on the subject. “Once it is established that the borrower intends to repay, the default cannot be deliberate.”

Besides, with excessive focus on the “wilful defaulters,” the India Inc is being projected in a bad light in the eye of the general public, whereas the fact remains, they contribute a large part of the country’s Gross Domestic Product (GDP) and employment generation.

Rawat said in the present situation, the difficult times have to be faced by all the stakeholders- industry (borrowers) and the banks.

“The choice has to be between keeping the units alive by taking some hair cuts or squeezing it to suffocation,” he added.

In the case of Kingfisher Airlines and Mallya, the ASSOCHAM does not want to sit in judgement, but what it certainly wants is ‘let there not be a media and public trial as such a thing is not good for the industry, banks or even the country’s financial system.’

A consortium of 17 Public Service Units (PSU) banks including the State Bank of India (SBI), which had approached the Supreme Court against Mallya, had on Thursday rejected his repayment proposal.

Rejecting Mallya’s proposal to pay Rs 4,000 crores by September, the consortium of banks told the apex court that they have rejected it after ‘full consideration’.

Mallya, who is wanted by the law enforcing agencies for a default of over Rs. 9, 000 crores, had not appeared before the Enforcement Directorate after he sought an extension up to May.

The Enforcement Directorate had earlier issued summons to Mallya for “personal appearance” on March 18 under the provisions of the Prevention of Money Laundering Act (PMLA).

Following Mallya’s request seeking extension, the Enforcement Directorate last week issued a fresh summons to the liquor baron, asking him to appear before it on April 2 in the money laundering case.

Mallya, who is currently in the United Kingdom and is being sought out in India over charges of money laundering, claimed that the banks gave him loans after evaluating all aspects and asserted that he is not trying to evade the law enforcement agencies but is on a personal visit. (ANI)