Former Finance Minister P Chidambaram tweeted on the RBI list of wilful defaulters (File)
Congress leader P Chidambaram has urged the RBI to direct banks to continue to show unrecovered loans from fugitive business tycoons like Vijay Mallya, Mehul Choksi and Nirav Modi on their books, and make efforts to recover them, rather than writing them off as non-performing assets (NPA).
Describing the debate between a loan waiver and loan write-off - a reference to Union Minister Prakash Javadekar's swipe at Congress MP Rahul Gandhi - as "academic", Mr Chidambaram pointed out that the only people likely to be pleased with either development were Mr Modi, Mr Choksi and Mr Mallya.
"The debate on waiver or write-off is academic. People who are mighty pleased are Nirav Modi, Mehul Choksi and Vijay Mallya! Rules are made by human beings. If a rule can be made, it can be unmade too," P Chidambaram tweeted Thursday morning.
"Only way to undo the monumental error is for RBI to direct banks to reverse the entries and continue to show the unrecovered loans from the fugitives as "Outstanding Loans" on their books and take steps to recover them," the former Finance Minister added.
The comments come amid a war of words between the Congress and Finance Minister Nirmala Sitharaman, over allegations the centre "waived" Rs 68,607 crore in loans to people on a list of 50 wilful defaulters released by the RBI this week.
Mr Gandhi has accused the BJP of "hiding" the list from parliament because it included friends of the ruling party.
Ms Sitharaman responded late Tuesday night and said the Congress was "sensationalising facts by taking them out of context".
The Finance Minister said provisioning for writing-off of non-performing assets were in accordance with RBI guidelines and that "banks continue to pursue recovery" despite NPAs being written off in full.
"9,967 recovery suits, 3,515 FIRs, invoking Fugitive Amendment Act in cases are on now. Total value of attachment and seizures in case of Nirav Modi, Mehul Choksi, Vijay Mallya: Rs 18,332.7 crore," she said.
On Wednesday Mr Chidambaram also said: "When they are fugitives, the technical rule in the book should not be applied to them. That is my view".
Also on Wednesday, Union Minister Prakash Javadekar hit out at Mr Gandhi, suggesting he "take tuition from P Chidambaram on the difference between "write-off" and "waive-off".
Mr Javedekar said the Narendra Modi government "has not waived off any loan. Write-off is a normal accounting process. It doesn't stop recovery or action against defaults".
A "write-off" is an accounting term used to denote assets whose value becomes zero. Written-off loans refer to debt factored as a loss even though the lender may continue attempts to recover it.
By contrast, a loan "waiver" is the surrendering the liability of the borrower - in this case the people on the list of "wilful defaulters" by the lending institution - the RBI.