Use one-time settlement policy for loans sparingly: Parliamentary panel to IREDA
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 on Thursday.
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.