November 29, 2017
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Loan waiver rumour debunked: government used IBC and recapitalisation to tackle large NPAs and bar wilful defaulters.
Government denies waiving loans of large defaulters, instead enforcing recognition of NPAs revealed by Asset Quality Review, requiring upfront provisioning, and using the Insolvency and Bankruptcy Code with referrals to tribunals for timebound recovery. An ordinance bars wilful defaulters from participating in resolution processes. Concurrently, substantial recapitalisation of Public Sector Banks-through bonds, budget provision and market dilution tied to reforms-was announced to restore bank strength and enable credit flow to honest borrowers.