Under a stinging attack by opposition parties in the Rajya Sabha, Finance Minister Arun Jaitley clarified the news reports about the Rs. 7,000 Crore Loan ‘Write-Off’ issue. Jaitely categorically stated the meaning of the ‘Write-Off‘ and asked the members to not to go by the literal meaning. He said, “There is a 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 clarified that State Bank of India (SBI) has not waived Rs 7,000-crore loans, including that to Vijay Mallya.
Parliament logjam still continues on this matter. CPM leader Sitaram Yechury and Congress leader Anand Sharma’s ferocious attacks on this issue led to Jaitley’s intervention. He clarified the doubts of members of parliament. Jaitley attacked congress and referred them as the main culprit because the loan restructuring started during their government.
Jaitley said “This is the only loan for which second restructure asked by that government. So, we inherited a terrible legacy. In the accounting book, the performing assets becomes non-performing that’s all. The liability to pay and right to recover still remains”.
SBI Chairman Arundhati Bhattacharya also sought to downplay the loan write-offs. She explained the control mechanism for such cases. SBI has clubbed under the bad loans under a different head and making efforts to recover loans from such defaulters. She said, “”No let off of borrowers happened and all processes are focused for full recovery. The word “write-off” is a technical term and used in the layman’s way of understanding these words is completely misleading”.
Till the end of second quarter, SBI had written-off loans worth Rs. 6,060 crore, and collectively, it has written-off Rs. 10,673 crore in the first half of the current fiscal. SBI was the leader of the consortium of 17 banks which gave loan to Kingfisher. SBI has taken physical possession of many properties including Goa’s Kingfisher Villa. The auction by the bank failed to attract any bidder for that villa.