‘This is the only way. Come back,’ PM tells absconding loan defaulters.
The country’s banking system was very strong now with bad loans at a five-year low, thanks to reforms to resolve their challenges over the last six-seven years. Over ₹5 lakh crore has been recovered from the lakhs of crores extended as loans before 2014 that had turned bad, he stated.
“The transparent and committed manner in which the government has worked is also reflected in the money received back by banks. In our country, when someone runs away after taking a bank loan, it is discussed a lot. But when a strong government gets it back, no one discusses it,” he noted wryly in an address to bankers and industrialists on ‘Creating Synergies for Seamless Credit Flow & Economic Growth’.
Efforts to bring absconding loan defaulters back into the country were still on. Policies, legislation as well as diplomatic channels have been deployed to convey a very clear message – “This is the only way. Come back,” he observed.
Prior to 2014, some had begun to think that banks belonged to them. “It had become a way of thinking that banks are our own. ‘All that is inside banks is also ours. Whether it stays in the bank or with me, what difference does it make…’ And whatever was desired, was asked for. And whatever was asked for, was given. At that time, it wasn’t known that in 2014, the country will reach a different verdict,” he commented.
‘A big milestone’
“Today, banks’ strength has grown so much that they are ready to energize the country’s economy and can play a big role in making India self-reliant. I consider this phase a big milestone for India’s banking sector. But you would have seen that milestone is also an indicator of our future journey. I see this as a starting point for Indian banks’ new future as well,” he remarked.
‘It is time’ for bankers to support wealth and job creators. Banks must work on enhancing the country’s balance sheet while enlarging their own, he stressed.
Comparing the current situation to the national leap of faith triggered by the key turning points in 1930 (the Dandi March) and 1942 (the Quit India movement) for India’s freedom struggle that eventually culminated in attaining Independence in 1947, he said: “When I am talking of a leap now, after 75 years of Independence, we have reached a situation that in a real sense, the ground is firm for making the leap, the target is set, we just have to set off.”
Mr. Modi urged each bank branch to ensure that they have at least 100 clients doing 100% transactions digitally by August 15, 2022 and set goals such as helping 10 youth or small businesses in their domains.
“Banks need to think big and use innovative approaches. Be it a public or private sector bank, the more we invest in citizens, the better it will be for the country’s people. The historic reforms that we have undertaken in ‘AtmaNirbhar Bharat’ has opened new opportunities for the country. To fund and invest in our aspirations, can there be a better time than now?”
To allay bankers’ fears about post-lending investigation and arrests, he said: “In national interest, any honest work done in good faith – keep my words written down and save this video clip with yourself – I am with you. Mistakes also happen, but if any such difficulty comes, I am standing here to become a wall and protect you. But we have to do our bit to take the country forward. With such a firm foundation and such a big opportunity to touch the sky, if we waste our time in thinking, then I believe coming generations will never forgive us.”
While Indian infrastructure projects were getting a lot of investments, he asked how many large infra companies the country had, and suggested banks should help firms scale up across sectors.
“If our infrastructure companies work on the scale of projects from the previous century, with technologies from the previous century, can they then meet our aspirations for the 21st century? Today, if they have to work on a large scale and make bullet trains and expressways, they need larger equipment and capital for that. Why don’t banks want one of our country’s infrastructure companies to be among the top five in the world?”
Recalling an incident from his school days, Mr. Modi pointed out that banks used to hold a lot of outreach programs to create awareness before they were nationalized but that attitude changed post-nationalisation.