Responding to Finance Minister Arun Jaitley’s statement in the Rajya Sabha on Wednesday that the writing off of loans was not a waiver but just an accounting entry, CPI(M) general secretary Sitaram Yechury said “it means that the banks do not attempt to recover these because they do not affect their balance sheets any longer.”
Mr. Jaitley had intervened in the Rajya Sabha on Wednesday when Mr. Yechury claimed that the State Bank of India had waived Rs. 7,000 crore from its non-performing assets of loans that could not be recovered. “Written off does not mean waiver .... It does not mean that the loan ceases to be a loan. We will still chase the loan,” the Finance Minister had said.
Responding to this on Thursday, Mr. Yechury said that while the RBI had clarified that the write offs “include — I repeat, only include — a large portion of the technically written-off accounts where the recovery efforts continue as usual, ... RBI’s former Deputy Governor K.C. Chakrabarty has noted, after a technical write-off, when the bad loan is no longer on the books, there is no incentive for banks to pursue recovery.”
Foreign contributionsMr. Yechury also disagreed with the Finance Minister on the Foreign Contribution Regulation Act (FCRA), 2010.
“During my speech, the Finance Minister intervened to explain the amended FCRA as a mere technicality, and not having any effect on the funding of political parties. This is yet again a sleight of hand. The FCRA was amended with retrospective effect not by introducing and debating a Bill in Parliament,” he said. “The government, instead, brought an amendment to the FCRA in February 2016 through the 2016 Finance Bill to avoid scrutiny .... The Representation of the People Act bars political parties from receiving foreign funds but after this amendment, they can receive funding from foreign donors which will bypass government scrutiny.”
