It goes with out saying that the proposed “mortgage melas” are certain to be a headache for the federal government within the close to future. One fails to see the rationale behind the Finance Minister saying that no MSME-stressed mortgage can be categorised as a non-performing asset until March 31, 2020. Such mortgage melas have been held beneath the Congress regime and turned out to be a moist squib. It’s no marvel then that these loans turned out to be the unhealthy money owed and the banks involved have been requested to put in writing them off so as to current a rosy image of stability sheets.
The lending of sentimental loans with undesirable relaxations in lending norms of banks might show to be disastrous to the banking trade which is already in turmoil. The aggressive marketing campaign and mortgage melas by business banks might push individuals even with weak monetary profiles to turn into the debtors and finally turn into defaulters that may solely add to mounting non-performing property. Banks will turn into the casualty. The stimulus packages and gentle loans to spice up the financial system may be termed piecemeal options at greatest.
N. Sadhasiva Reddy,