VASCO
Vijaya Bank MD & CEO Kishore Kumar Sansi has admitted that while recovery rules were the same for large and small wilful defaulters, loopholes in the legal system had enabled big corporates to take advantage while settling their bank debts.
Speaking to The Goan along the sidelines of a function at Bogmalo, Sansi was responding to a query on the long rope provided by banks to large wilful defaulters like Vijay Mallya, especially when the same banks were quick to act against small-time defaulters.
“The law is same to every borrower and the recovery process is also the same. Some of the big corporate houses take advantage of loopholes in the legal system and manage to evade recovery for some time,” explained Sansi, a banker for 35 years.
“Once the bank approaches the Debt Recovery Tribunal, it can takes almost 4-5 years to dispose off the case, and if the case goes in the bank's favour, the corporate houses will immediately approach other legal courts and the case can drag on for years together. Using this to their advantage, they manage to evade the recovery till the hearing is disposed off in the favour of the bank,” Sansi added.
Sansi sought to point out that even during an economic crisis, banks had provided the same help and assistance to smaller entrepreneurs.
“But despite this, if there is a wilful defaulter, then the bank recovers the loan by attaching their assets. The only difference is that smaller entrepreneurs who are wilful defaulters cannot engage the same legal services as big corporates,” said Sansi, who was an executive director with Punjab and Sind Bank before joining Vijaya Bank.
The Vijaya Bank MD & CEO informed that measures are being set in place to deter the big-time borrowers from wilfully defaulting on their loans.
“The Parliament has approved the bankruptcy code which will be a deterrent to the big-time borrowers who try to default wilfully and things will change once this is implemented," stated Sansi.
“Besides the bankruptcy code, banks are also trying to put their own mechanisms in place to avoid such situations in future,” Sansi added.
