“Favouritism” in govt judgments down; India betters its global rank

India’s global ranking in favouritism shown by government officials to powerful corporates has bettered sharply from 94th in the last year to 49th place this year. The Rank nevertheless, still remains far below other key economies. As per a yearly study by the World Economic Forum (WEF), India’s ranking has also bettered notably in terms of public trust in politicians.

Qatar ranked 1st and is followed by New Zealand, Singapore, Finland, UAE, the Netherlands, Japan, Norway, Sweden and Switzerland in top 10. 

The study says, moreover, India has bettered its position with respect to diversion of public funds and uneven payments and bribery at government institutions. In the BRICS block, India’s position is superior than that of Russia (87th), South Africa (104th) and Brazil (108th). But, it rests far below that of China (22nd).

“Willful defaulter tag is a powerful weapon in hands of banks for resolving bad loans”: RBI Governor

The wilful defaulter tag is a powerful weapon in the hands of creditors for resolving distressed assets. It shuts out access to credit within the Indian financial system for a borrower,” Rajan stated without naming Vijay Mallya, who was recently declared by Union Bank of India (UBI) to declare as a willful defaulter.

The RBI Governor  assured that he will challenge UBI’s decision who declared him willful defaulter. Besides United Bank of India (UBI), Kingfisher owes about 9,140 crore rupees to about a dozen banks. Vijay Mallya is the chairman of United Breweries, producer of India’s best-selling beer brand Kingfisher. He is also the chairman of United Spirits, now controlled by Diageo.

Definition of “wilful default” as per RBI:-

A “wilful default” would be supposed to have happened if any of the subsequent events is observed:-

(a) Deliberate non-payment of the dues regardless of sufficient cash flow and good networth: The unit has defaulted in meeting its payment/ repayment commitments to the lender even when it has the capacity to honor the stated obligations.

(b) Siphoning off of funds to the disadvantage of the defaulting unit: The unit has defaulted in meeting its payment/ repayment commitments to the lender and has not utilized the finance from the lender for the definite reasons for which finance was availed of but has diverted the funds for other reasons.

(c) Assets financed either not been purchased or been sold and proceeds have been mis-utilized,  Misrepresentation/ falsification of records or Fraudulent transactions by the borrower: The unit has defaulted in meeting its payment/ repayment obligations to the lender and has siphoned off the funds so that the funds have not been utilized for the specific purpose for which finance was availed of, nor are the funds available with the unit in the form of other assets.

(d) Disposal/ removal of securities without bank’s knowledge: The unit has defaulted in meeting its payment/ repayment obligations to the lender and has also disposed off or removed the movable fixed assets or immovable property given by him or it for the purpose of securing a term loan without the knowledge of the bank/lender.