Nagaland Congress leader and AICC Minority Department National Coordinator Incharge of Manipur, Rajesh Kumar Sethi, has expressed deep concern over the staggering Rs 16.35 lakh crore in bad loans written off by Indian banks over the past decade. He highlighted that a significant portion of these write-offs have disproportionately benefited large corporate houses. This revelation, made by the Union government in Parliament, has raised questions about the accessibility of credit for ordinary citizens, particularly in regions like Nagaland, he said.
Sethi pointed out the alarming disparity, stating, “The bulk of these write-offs has favored large industries and services, amounting to Rs 9.26 lakh crore of the total NPAs written off, while ordinary people—farmers, small entrepreneurs, and middle-class families—continue to face insurmountable barriers in securing loans.” He emphasized that, in Nagaland, the lack of accessible credit is a glaring injustice, particularly when it comes to homeownership or small business development, both of which are essential for the region’s economic growth.
Sethi also criticized the ease with which massive corporate loans, including those worth Rs 1,000 crore or more totaling Rs 61,027 crore, have been waived off with little accountability. “While ordinary people encounter endless hurdles—strict documentation, high interest rates, and outright rejections—corporate defaulters exploit loopholes by closing one company and starting anew, effortlessly securing fresh loans,” he said.
One of the examples Sethi referenced was industrialist Anil Ambani, whose companies have defaulted on massive loans but still managed to secure further credit. “The Reserve Bank of India’s guidelines on provisioning for bad loans appear to have been selectively applied, leaving the ordinary populace underserved while favoring such defaulters,” Sethi added, demanding an immediate inquiry into why loans remain elusive for the hardworking people of Nagaland while corporate defaulters are let off with impunity.
Sethi’s concerns were echoed during the 5th National Conclave of the All India Professionals’ Congress (AIPC), held in Raipur on July 30-31, 2022, where he posed a critical question to former RBI Governor Raghuram Rajan regarding the banking sector’s priorities and the exclusion of ordinary citizens from credit access. Rajan, reflecting on his tenure as RBI Governor, explained policies like the Asset Quality Review (AQR) and stricter provisioning norms aimed at cleaning up bank balance sheets. He also highlighted the introduction of initiatives like Jan Dhan Yojana to promote financial inclusion. However, Rajan stressed that India’s underperformance, particularly in creating jobs and supporting small borrowers, predates the pandemic. He warned against policies that favor large corporates, urging for a rethinking of the current economic path.
Congress leader Rahul Gandhi has also criticized the current banking policies, calling them biased towards crony capitalism at the expense of the common man. “The government’s failure to hold corporate defaulters accountable undermines trust in the economy,” Gandhi said, calling for a comprehensive overhaul of the financial system to ensure loans are accessible to small businesses, farmers, and homebuyers, especially in underserved regions like Nagaland.
Imran Pratapgarhi, AICC Minority Department Chairman and MP, has voiced his solidarity with marginalized citizens, highlighting the systemic favoritism that allows corporate elites to thrive while ordinary citizens are denied access to credit. “The government must prioritize the dreams of the youth and working class over the interests of a few powerful defaulters,” Pratapgarhi emphasized, advocating for a people-centric banking model aligned with principles of justice and equality.
Sethi further mentioned, “While banks across India readily waive off massive corporate loans, the people of Nagaland and the Northeast continue to struggle even to access basic credit. Entrepreneurs, small businesses, and self-employed individuals face endless hurdles, from excessive documentation to collateral demands, making it nearly impossible to secure loans.”
Rajesh Kumar Sethi reaffirmed his solidarity with the people of Nagaland and the Northeast, demanding urgent banking reforms to ease access to credit. He concluded, “The government must ensure that banks prioritize local businesses, farmers, and youth, rather than favoring only large corporations. If India truly believes in inclusive development, then financial empowerment must reach every corner of Nagaland and the Northeast—not just corporate boardrooms.”