Recovery Matter Advocate on bad loan problems in India

1
Recovery Matter Advocate

• on Bad Loan Problems In India

2

• The growth of Indian economy based on political
  stability and great inflow of foreign investment
  influenced the study of rating agency Fitch which
  conveyed in its global economic outlook report
  that GDP growth rate in India is expected to
  increase by 5.6 per cent in the ongoing year and
  it can further increase, up to 6.5 per cent in
  the next fiscal year. This forecast by Fitch
  seems slightly more optimistic than the RBI'S
  projected figures of 5.5 per cent 6.3 per cent in
  the respected period.
• "Lifting GDP growth to substantially higher
  levels would require large productivity gains
  through implementation of reforms related to
  governance, product and labour markets, as well
  as reduction of infrastructure bottlenecks."-
  Spokesperson, Fitch.

3

• Both consumer price and retail inflations slowed
  down but food inflation is persistently annoying
  the large section of society. It was 9.42 percent
  in August and 9.36 percent in the month of
  July." 3 to 4 per cent inflation rate is
  considered ideal for an economy and inflation
  rate higher than the growth rate is really a
  concern for the economy. Hence, this is the sole
  reason that RBI is still uncomfortable in
  increasing the bank rate and repo rate. The apex
  bank can only go to revise the rates unless the
  government takes tough initiatives for curbing
  the inflation rate."- Kislay Pandey, Recovery
  Matter Advocate, the Supreme Court of India. From
  the perspective of RBI governor the country must
  achieve 8 per cent inflation rate in the current
  fiscal and 6 per cent in the first quarter of
  next fiscal year.

4

• "In a recent verdict by the Supreme Court of
  India where it cancelled the allocation of 214
  coal blocks, there is an imminent danger of
  rising power prices apart from the Rs. 1 lakh
  crore of loss in the form of money lent to coal
  and energy companies by different state-run
  banks. This extra pressure to banks further makes
  the RBI reluctant to increase bank and repo rate.
  And an immediate action by the Centre government
  to re-allocate the coal blocks can define the
  future of power sector and fate of the lending
  banks."- Kislay Pandey, Recovery Matter Advocate,
  the Supreme Court of India.

5

• At this significant juncture of time the apex
  court clearly mentioned that it is not giving any
  special dispensation to the banks to recast loans
  even sounds more riskier to banks if they recast
  these accounts. Banks are already suffering from
  bad loans pertaining to issues which are not
  genuine and uncalculated. This financial load of
  bad loans on banks evidently increase the capital
  burden of the government and discrepancies in the
  budget calculations.