Aug 18, 2012, 12.59AM ISTNEW DELHI: The government is asking banks and
financial institutions to prevent willful defaulters from floating new
ventures for at least six years by choking the flow of funds, especially
long-term capital.
Even auditors of these companies, who are seen to be negligent, could
face action with the finance ministry suggesting that lenders lodge
complaints with the Institute of Chartered Accountants of India (ICAI),
the regulator for the profession.
The suggestions come at a time when there has been spurt in bad debt of
banks with gross NPAs as a percentage of loans rising to 3.5% at the end
of June 2012 from 2.6% a year ago. During this period, private sector
players, both new and old generation banks, had witnessed a decline in
the proportion of gross NPAs.