Rajya SabhaLok Sabha

August 10, 2017

Sukhendu Sekhar Roy speaks on The Banking Regulation (Amendment) Bill, 2017

Sukhendu Sekhar Roy speaks on The Banking Regulation (Amendment) Bill, 2017

FULL TRANSCRIPT

Sir, I would like to record my dissent about the way the Bill is being discussed today and possibly in the past too. Everyday in the media, it is said that parliamentarians are not serious, they do not want to discuss Bills, etc. But we want to discuss. This Parliament is essentially made for legislation, and not for functions, ceremonies, etc. With this note, I would like to speak on this Bill.

First of all, the objective of this Bill in one line: It seeks to authorise the Reserve Bank of India to issue directions to any banking company or, companies, to effectively use the provisions of the Insolvency and Bankruptcy Code for the timely resolution of stressed assets. Here, I have a doubt – whether at all there will be time-bound results after imposition of this Financial Bankruptcy Code.

It is true that the NPA has grown alarmingly in recent years. As per the estimates in March 2017, the gross operating profit of the 21 PSU banks taken together stood at Rs 1,50, 240, but the net profit was only Rs 574 crore; whereas the gross NPAs of these PSU banks is Rs 6,05,991 crore. This is highly alarming, there is no doubt about it.

But the question is, whether there would be any impact of the Insolvency and Bankruptcy Code. So far, the results have come up short of being achieved in a time-bound manner and am constrained to say that no, this objective cannot be achieved. Due to the lack of time, I cannot go through the each and every provision of this Bill. But the Bill has essentially created enormous scope for more and more, and unending litigations.

I am giving one example. Recently the Government advised the RBI to initiate proceedings under the Insolvency and Bankruptcy Code against 12 defaulting account holders, and one such defaulting account-holder has got attested from the High Court and all proceedings against the entity have been stayed; for years together this will continue. In this way, each and every big fish has eaten up public money from the banks.

Now, there are 550 large NPA accounts, not 12. Naresh ji told us about 12; it is, maybe, 25 per cent of the total NPA but there are 550, according to the estimates of the RBI, as it appeared in newspapers. Hence, according to me the, amendments will help the big fishes who have eaten our public money rather than help in the recovery of valuable assets of the people of India.

As per RBI guidelines, criminal proceedings can be drawn against wilful defaulters. There are circulars, master circulars of RBI, there are a number of circulars whereby the RBI has directed banks to initiate criminal proceedings. I would request, through you, the Hon. Finance Minister, to inform this House about how many criminal proceedings have/had been initiated against those big fishes so far. This House wants to know, because the Hon. Finance Minister is also on record saying that criminal proceedings will be drawn against those defaulting – those who have committed a fraud, those who have siphoned off money through loans. If at all, how many criminal procedures have been initiated? Why is the Government shying away from naming those people?

The Government has pleaded before the apex court that, please for God’s sake, don’t reveal the identities of those people. Why this double standard? Can the Government place before the House, why has it not initiated any move to amend the archaic RBI Act of 1934 and the archaic Banking Regulation Act of 1949, whereby some draconian provisions have been made, enabling the RBI and the banks from disclosing or parting with any commercial information? The time has come for the Government to make a move to amend those archaic provisions, those draconian provisions of the archaic Acts? This is my demand before this Government, through you.

Now I’m giving you other examples: there are not only 12, but other defaulters that the RBI did not name, that the media has speculated about – 15 to 16 names, including Essar, Bhushan, Lanko, Videocon, Punj Lloyd, Electrosteel Steels, Aban Holdings, ABG Shipyards, Monnet Ispat, and other notorious names. Among them, one has run away, not Mallya, but another gentleman who has run away from this country, and he has taken the citizenship of St Kitts; and with St Kitts, the Indian Government has no extradition treaty, and so it cannot bring him back to this country and produce him before a court. So this is what is happening. This is why I say that this Amendment will do nothing. It will come with a big zero – with zero results, and that is why I oppose this Bill in its entirety.

Thank You, Sir.