New Delhi: A parliamentary panel has suggested the state-run Indian Renewable Energy Development Agency (IREDA) to use one-time settlement (OTS) policy sparingly to recover loans and follow financial prudence benchmarks.
“The measures like OTS must be utilised sparingly and definitely not for wilful defaulters. IREDA being a financial institution must follow the benchmarks of financial prudence and monitor performance of repayments so as to recall loans before those turn into NPAs (non-performing assets),” said a Committee on Public Undertakings in its report on IREDA tabled in Parliament today.
The panel noted that the IREDA is writing off huge amounts of loan and as the process is non-transparent, it may lead to possibility of wrongdoings.
It suggested that as technical write-off creates non- transparency and destroys the credit risk management system, it must be done sparingly.
The panel said, “Writing off should not develop as regular pratice in the company and it should take strict action against the defaulters and exclusively blacklist defaulters so that no further loan is availed by them from any financing agency.”
On decline in disbursement and recovery of loans, it said the IREDA needs to be very careful before sanctioning the loan to an entity so as to avoid such situations in future.
About bad loans or NPA, it said the IREDA should further strengthen its internal control mechanism and closely monitor the outstanding loans to reduce the level of its NPAs.
The committee said there is a need to improve the efficacy of its internal audit, ensure safety of the financial assets, monitor the financial health of the borrower, besides appointing lenders engineer to every project to keep a check on any deviation and to discourage any further non-compliance by the developers and the company as well.
Source: PTI
