Such ‘fair’ adds to the retail non-performing assets (NPAs) for the lenders as loans are disbursed without much due diligence, MSBEF said in a statement.
The announcement comes on the same day that the Union Minister of State for Finance Bhagwat Karadi is participating in a similar fair in Maharashtra’s Aurangabad, where it is expected to disburse Rs 2,900 crore in loans to public sector lenders.
According to MSBEF, no political party assists in the loan recovery process as past experience indicates that borrowers withhold payment of such loans.
During elections “…the same political parties demand waiving those loans so as to please the voters”, he said, adding that such incidents spoil the environment for recovery.
As per the report, public sector banks fail due to NPAs and they are then used to push for privatization of lenders.
According to the union, such lenders should be given “genuine autonomy”.
“The government, being the owner of the public sector banks, should give directions to the public sector banks. The government should address policy issues such as effective legal framework for recovery of dues, timely appointment of board of directors, etc.”
It should also ensure that banks hire adequate number of employees, charge minimum service charges from customers, and provide adequate and timely credit to small and medium-sized farmers and businesses.