The bill was referred to a joint Parliament committee which submitted its report last month.
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He ruled out any waiver in the event of education loan defaults, saying “some compassion” has to be shown if someone is unemployed and till he gets a job, but the loan can not be written off.
The bill empowers banks to take possession of collateral, except for farm land, in the case of loan default.
In a landmark move, the Central government on Tuesday introduced a bill in the Lok Sabha to give the transgender community a separate identify and also remove all stigmas associated with the community.
Pitching for speedier recovery of debt, he said, “We can not have a banking system where people take loans and do not repay”.
The Modi govt has come up with this legislation at a time when there is mounting concerns over loan recovery in view of stressed assets to the tune of over Rs 8 lakh crore in the banking system.
The move assumes significance as it comes against the backdrop of the case involving liquor baron Vijay Mallya, who owes almost Rs 9,400 crore to banks, but has left the country to take refuge in England.
As far as an amendment to Recovery of Debts due to Banks and Financial Institutions Act, 1993 (RDDBFI) Act is concerned, the bill will allow banks to file cases in tribunals having jurisdiction over the area of bank branch where the debt is pending. Says Rakesh Nangia, managing partner of Nangia & Co: “The original Act had a few loopholes, including lack of provisions for vesting”.
Jaitley said any section of society should know it pretty clearly that “when it takes loans, the loan amount has to be paid back”. “We should not create a culture that I have taken a loan and I can sleep well and banks should be answerable”, Jaitley said.
“Write-off will put banking structure into a position where banks are not able to extend loans”, he added. Most children in higher education are supporting themselves through education loans.
The Government of India on Monday will discuss amended bill in the Lok Sabha in order to strengthen the debt recovery laws with an aim to improve the ease of doing business in the country.
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“Nobody can move on the assumption, whether it is large industry or small industry of MSMEs, that loans will not be given back”, he said as he answered queries from members, including Saugata Roy (Trinamool Congress), B Mahtab (Biju Janata Dal) and N.K. Premchandran (Revolutionary Socialist Party) on the bill.
