Vijay Mallya's offer to pay Rs.4,000 crore out of Rs.9,000 crore pending debt conveys his "intention" to repay the loan, and the public sector banks should consider it carefully, industry organisation Assocham has said in a press note.
Impressing upon the banks not to get swayed away by the shrill of public discourse against the purported willful defaulters, apex industry body ASSOCHAM has said that offer made by industrialist 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 Mr 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 Mr 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. In business cycles, “difficult times do come about. At times, the entrepreneurs face a crisis like situation despite best of efforts. In the hindsight it does look as though the Indian industry, as was the case with the rest of the world, did over-step in expansions of capacities, stretching their balance sheets with high debts. But such an analysis is possible with the advantage of hindsight. Mr 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.” In the case of Kingfisher Airlines and Mr 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.”
#Mallya is serious to repay his loans, banks should accept his offer, says @followassocham pic.twitter.com/C8KgRPjMqs— Press Release Watch (@PrReleaseWatch) April 10, 2016
Impressing upon the banks not to get swayed away by the shrill of public discourse against the purported willful defaulters, apex industry body ASSOCHAM has said that offer made by industrialist 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 Mr 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 Mr 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. In business cycles, “difficult times do come about. At times, the entrepreneurs face a crisis like situation despite best of efforts. In the hindsight it does look as though the Indian industry, as was the case with the rest of the world, did over-step in expansions of capacities, stretching their balance sheets with high debts. But such an analysis is possible with the advantage of hindsight. Mr 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.” In the case of Kingfisher Airlines and Mr 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.”
