Newspapers and News channels these days are flooded with Mallya's flight to UK and the NPA (non-performing assets) scam. Its shocking to see that there are so many willful defaulters who have taken crores of loans and have just shown their back to the banks. No recovery is in sight. I, infact, came across an e.g. of PNB from whom some 4 companies had taken loan amounting to approx Rs.150 cr. It was later found out that all these four companies worked from a common address in Karolbagh, New Delhi. When the locational search was done, it was found out that their office space was equal to a size of a table and a chair and that space was a rented one. The owners were paying Rs.100 a month as rent. This is really surprising that the Banks are pleading before the Debt Recovery Tribunal and are now appealing before the Apex Court.
Why did all this got initiated in the first place ? This shows that proper scrutiny checks were not maintained by the Banks, to begin with. It appears that for small investors/laymen/salaried class, the banks have the stringent rules available. But when it comes to corporate lending, where does the checks and balances go ? Its all public money and it should be safeguarded at any cost. No Tom, Dick and Harry should be allowed to play with it. If there are securities given by defaulters, then it should be attached. If we say that the securities are not existing (Just like NSEL scam), then definitely there is a big flaw on the part of banks.
The Civil Service aspirants should study this issue very closely from all quarters possible. Who are the defaulters, Where is the flaw, What are the problems in recovery, What action the Government has taken, What are the strategies adopted by the defaulters to dupe the banks.. ?
Bigger picture of checks and balances is to kept in mind. Plug the loophole in the initial stage itself so that it does not become a monster which are are unable to handle.