Content with robust foreign capital flows and increasing public investment, Finance Minister Arun Jaitley on Saturday exhorted banks to support corporates to help spur private investment, a must for the economy to take off in a big way.
Gurugram: Content with robust foreign capital flows and increasing public investment, Finance Minister Arun Jaitley on Saturday exhorted banks to support corporates to help spur private investment, a must for the economy to take off in a big way.
"Indian private sector needs to expand in a big way. It needs to invest and that's when all engines of the economy start firing," Jaitley said at a seminar on debt recovery organised by the finance ministry.
"To support that, you need banks to ensure flow of credit and support the private sector in order to expand their (private sector) investments. Therefore, the role of the banks in supporting growth, particularly as far as the domestic private sector is concerned, is extremely significant," he said.
The minister further said bank credit has to pick up which has slowed over the last few years due to rising bad loans and a slow recovery process.
Pitching for expeditious adjudication of debt recovery cases, Jaitley made the point that the doctrine of natural justice of giving opportunity to defaulters to defend themselves need not be carried to an "unnatural extent".
"It is not a usual judicial or quasi-judicial procedure when endless opportunities have to be granted to people to defend cases because if natural justice is carried on to unnatural extents, litigation will become unending. Therefore, efficiency has to be introduced into the recovery procedure as far as the defaulting parties are concerned," he said.
Close to 95,000 cases involving more than Rs 5 lakh crore are pending before debt recovery tribunals across the country.
"So, every case that the litigant manages to delay hurts the larger investment environment of the country because if money of banks are blocked with some defaulters, it prevents the bank from funding others who otherwise could have utilised this investment for fruitful purposes and benefit of the country," he added.
The minister also spoke of liberalisation of FDI policies because of which India has emerged as a preferred destination of foreign investment.