A loan turns bad if the interest or installment remains unpaid for a period of more than 90 days after the due date. I think bad loan is more appropriate term to describe it rather than the oft-repeated terminology “nonperforming asset” (NPA).
Be that as it may, such lost assets of Indian banks have crossed a whooping Rs. 87,300 crore in 2017-18 fiscal ~ topped by scam-tainted Punjab National Bank which is reeling under more than Rs. 14,000 crore scam allegedly perpetrated by Nirav Modi and associates. Only just one bank, PNB has suffered a net loss of 12,283 crore last fiscal.
Unfortunately, while we let Vijay Mallyas and Nirav Modis go abroad after they had stolen a huge amount of taxpayers money, poor persons have been targeted for compensating the loot of those big thieves. It can easily be understood that it is mainly the poor persons who are made to pay through the nose in the name of penalty for keeping less than what a bank has marked as minimum balance.
It is mainly economic constraints that make people unable to keep minimum balance in their bank accounts. Huge amount of money has been sucked in from the purse of the poor people. It is reported that our banks have collected an astronomical Rs. 5,000 crore from customers for non-maintenance of minimum balance in their account in 2017 – 18. This consists mostly of, so to speak, the blood of the poor people.
It is the lack of balance on the part of the administration to adopt a policy of letting Mallyas go abroad and penalizing the masses for the loss. Ironically, things have been going in such a way that makes us believe that money power forces the masses pay for the misdeeds of some macro defaulters. The policy of imposing penalty for keeping less than some thousands in a bank account is, as it were, an act of imposing double punishment. We are made to pay for the loss of our own public money!
Sujit De, Kolkata