Congress questioned the latest Reserve Bank of India (RBI) instructions to the banks allowing for “technical write-offs” for accounts categorised as wilful defaults and allowing such accounts to take fresh loans after a cooling-off period. Party’s general secretary Jairam Ramesh demanded to know if the Narendra Modi-led Central Government pressurised the apex bank to frame these new directions.
On June 8, RBI issued instructions under ‘Framework for Compromise Settlements and Technical Write-offs’ that allows the banks and other financial entities to “undertake compromise settlements or technical write-offs in respect of accounts categorised as wilful defaulters or fraud without prejudice to the criminal proceeding underway against such debtors.” It also permits such accounts to take fresh loans after a 12-month “cooling period”.
Quoting the new instructions, Mr. Ramesh accused Mr. Modi of always being eager to bend rules to help his “friends in a few large business groups”.
