P.Chidambaram statement: Banks writing off loans

*P.Chidambaram

*Statement:

Earlier, banks would write off corporate loans with trepidation because they would be asked questions by RBI and MoF

Now, they do it with impunity through the IBC process

Banks get together in a Committee of Creditors & "approve" a Resolution Plan demanding a huge write- off

Once the Resolution Plan is approved by NCLT, the corporate debtor is absolved of all liability

Banks call this a "haircut". IBBI has calculated the "haircut" in 517 cases to be 69% of the loan amounts

The total "haircut" in 517 cases has been calculated at

Rs 5,32,000 crore

In the old language, it means that banks have written off Rs 5,32,000 crore in 517 cases!

That is an average of Rs 1000 crore per case!

Have you heard of a haircut that cost Rs 1000 crore?!

Source: https://www.facebook.com/969546993151976/posts/pfbid02zFeR8AhhJLgWiFiPyTexRd9iu1TSHktJtWYG1uwbFBnXEHhXgPb4yyemnXc65McKl/?app=fbl

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