Govt of India using adjudication bodies to "help out" corporate defaulters of banks: TU-civil society meet

By A Representative
A joint meeting of civil society and trade union organizations has accused the Government of India of making frenzied attempts of pushing nationalized banks through Reserve Bank of India to take defaulting companies to the National Company Law Tribunal (NCLT), and start bankruptcy proceeding. This, the meet said, is a major reason for a sharp rise in non-performing assets (NPAs) of banks.
Providing an example, meet was told, Bhushan Power and Steel Ltd defaulted on Rs 37,248 crore, and now under the Insolvency and Bankruptcy Code (IBC), 2016 -- the insolvency and bankruptcy law -- Tata Power and JSW Steel Ltd have bid Rs 17,000 crore and Rs 11,000 crore to buy it up.
If the deal materializes, banks will lose over Rs 20,000 crore of public money and companies will just shake off their debt without any repercussion. Hence, the more companies are taken to NCLT, the more loss for banks. Especially smaller banks which unable to provide provisions will go bust, it was pointed out.
A quasi-judicial body that adjudicates issues relating to companies in India, NCLT was established under the Companies Act 2013 and was constituted on June 1, 2016. It consolidates corporate jurisdiction of the Company Law Board, Board for Industrial and Financial Reconstruction (BIFR), Appellate Authority for Industrial and Financial Reconstruction (AAIFR) and the powers relating to winding up or restructuring and other provisions, vested in High Courts.
Organized in Delhi by Act Now for Harmony & Democracy (ANHAD), All India Bank Officers' Confederation (AIBOC), Centre for Financial Accountability (CFA), Delhi Solidarity Group (DSG), National Alliance of People¹s Movements (NAPM), and New Trade Union Initiative (NTUI), the meet discussed on how the government is letting go wilful defaulters of bank scams.
The meeting was organised in the wake of recent spate of fraud unearthed at the Punjab National Bank, which "exposed" the crises and challenges being faced by public sector banks in general, and poor strategies of the government to deal with rising NPAs.
Among those who addressed the meeting included Gautam Modi, general secretary, NTUI; CPI(M) leader Nilotpal Basu; Anupam from Swaraj India; MK Venu, senior journalist with the "The Wire"; Mohan Guruswamy, policy analyst; Meera Nangia from Delhi University; and Moumita from AIBOC.
Pointing out that big corporations who owe 80% of NPAs go scot-free, speakers said, according to government data, between 2014 and 2017, in all 1,146 cases of fraud cases were registered where employees of public sector banks were involved. Another and 568 cases have been registered vis-a-vis private sector banks.
"The same data also shows that considering that 70% of market share is held by the public sector banks, and that fraud cases are more in private sector banks compared to their public counterpart", the meeting was told.
Speakers said, looking at only the scams would be myopic if we do not consider the ‘legal’ loot of public money -- the write-offs. Just in 2016 -17 alone public sector banks had written-off Rs 81,683 crore worth of bad loans. The Punjab National Bank alone had written-off Rs 9,205 crore.
It was also suggested that the recovery rates of loans in IBC have "not been encouraging", and in some cases banks only got 6% of the total loan. At the core of the problem lies in the fact that the larger the loan, lesser the security and collateral. Hence it is easier for big borrowers to get large loans from banks without much risk. This cavalier attitude has plummeted into a banking sector crisis.

Comments

Gram sabha as reformer: Mandla’s quiet challenge to the liquor economy

By Raj Kumar Sinha* This year, the Union Ministry of Panchayati Raj is organising a two-day PESA Mahotsav in Visakhapatnam, Andhra Pradesh, on 23–24 December 2025. The event marks the passage of the Panchayats (Extension to Scheduled Areas) Act, 1996 (PESA), enacted by Parliament on 24 December 1996 to establish self-governance in Fifth Schedule areas. Scheduled Areas are those notified by the President of India under Article 244(1) read with the Fifth Schedule of the Constitution, which provides for a distinct framework of governance recognising the autonomy of tribal regions. At present, Fifth Schedule areas exist in ten states: Andhra Pradesh, Chhattisgarh, Gujarat, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha, Rajasthan and Telangana. The PESA Act, 1996 empowers Gram Sabhas—the village assemblies—as the foundation of self-rule in these areas. Among the many powers devolved to them is the authority to take decisions on local matters, including the regulation...

MG-NREGA: A global model still waiting to be fully implemented

By Bharat Dogra When the Mahatma Gandhi National Rural Employment Guarantee Act (MG-NREGA) was introduced in India nearly two decades ago, it drew worldwide attention. The reason was evident. At a time when states across much of the world were retreating from responsibility for livelihoods and welfare, the world’s second most populous country—with nearly two-thirds of its people living in rural or semi-rural areas—committed itself to guaranteeing 100 days of employment a year to its rural population.

Policy changes in rural employment scheme and the politics of nomenclature

By N.S. Venkataraman* The Government of India has introduced a revised rural employment programme by fine-tuning the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which has been in operation for nearly two decades. The MGNREGA scheme guarantees 100 days of employment annually to rural households and has primarily benefited populations in rural areas. The revised programme has been named VB-G RAM–G (Viksit Bharat Guarantee for Rozgar and Ajeevika Mission – Gramin). The government has stated that the revised scheme incorporates several structural changes, including an increase in guaranteed employment from 100 to 125 days, modifications in the financing pattern, provisions to strengthen unemployment allowances, and penalties for delays in wage payments. Given the extent of these changes, the government has argued that a new name is required to distinguish the revised programme from the existing MGNREGA framework. As has been witnessed in recent years, the introdu...

Rollback of right to work? VB–GRAM G Bill 'dilutes' statutory employment guarantee

By A Representative The Right to Food Campaign has strongly condemned the passage of the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB–GRAM G) Bill, 2025, describing it as a major rollback of workers’ rights and a fundamental dilution of the statutory Right to Work guaranteed under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). In a statement, the Campaign termed the repeal of MGNREGA a “dark day for workers’ rights” and accused the government of converting a legally enforceable, demand-based employment guarantee into a centralised, discretionary welfare scheme.

A comrade in culture and controversy: Yao Wenyuan’s revolutionary legacy

By Harsh Thakor* This year marks two important anniversaries in Chinese revolutionary history—the 20th death anniversary of Yao Wenyuan, and the 50th anniversary of his seminal essay "On the Social Basis of the Lin Biao Anti-Party Clique". These milestones invite reflection on the man whose pen ignited the first sparks of the Great Proletarian Cultural Revolution and whose sharp ideological interventions left an indelible imprint on the political and cultural landscape of socialist China.

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Making rigid distinctions between Indian and foreign 'historically untenable'

By A Representative Oral historian, filmmaker and cultural conservationist Sohail Hashmi has said that everyday practices related to attire, food and architecture in India reflect long histories of interaction and adaptation rather than rigid or exclusionary ideas of identity. He was speaking at a webinar organised by the Indian History Forum (IHF).

India’s Halal economy 'faces an uncertain future' under the new food Bill

By Syed Ali Mujtaba* The proposed Food Safety and Standards (Amendment) Bill, 2025 marks a decisive shift in India’s food regulation landscape by seeking to place Halal certification exclusively under government control while criminalising all private Halal certification bodies. Although the Bill claims to promote “transparency” and “standardisation,” its structure and implications raise serious concerns about religious freedom, economic marginalisation, and the systematic dismantling of a long-established, Muslim-led Halal ecosystem in India.

From jobless to ‘job-loss’ growth: Experts critique gig economy and fintech risks

By A Representative Leading economists and social activists gathered in the capital on Friday to launch the third edition of the State of Finance in India Report 2024-25 , issuing a stark warning that the rapid digitalization of the Indian economy is eroding welfare systems and entrenching "digital dystopia."

Search This Blog