Honest citizens bear burden of bank defaulters, says president

President Ram Nath Kovind said genuine business failures can happen but when there is a wilful and criminal default on a bank loan, "it is families of fellows Indians that suffer."

In his first remark that was seen as significant in the context of the PNB scam, Kovind said, "The innocent citizen loses out, and ultimately the honest taxpayer bears the burden when huge defaults happen".

On the contrary, the President pointed out that: "It is admirable that at the grassroots of our country – in small hamlets and among traditionally underprivileged and deprived communities – MUDRA entrepreneurs are striving to pay back their loans. These are hardworking Indians, many of them women. They are borrowing small sums as capital to set up little businesses. They are building their dreams – I would say, they are building our India's dreams."

Kovind was addressing the 34th annual session of FICCI Ladies Organisation (FLO).

He said the government has taken decisive steps to promote a culture of enterprise among ordinary citizens, especially women.

"The Stand-Up India initiative was launched in April 2016 to encourage entrepreneurship among women, SCs and STs. About 45,000 loans have been disbursed, mainly to sole proprietors. Almost 39,000 of these have gone to women an overwhelming proportion," said Kovind.

Under the MUDRA scheme, the President said, over the past three financial years, about 117 million loans have been sanctioned.

Close to 88 million of these loans have gone to women entrepreneurs.

"You will be glad to know that, as of December 2017, the number of NPAs in the MUDRA scheme is less than 8% of the loans sanctioned," said Kovind.

"I want businesses not to compromise on quality or standards. But do see how – in your companies – you can incentivise small, grassroots enterprises that are either run by women or employ a significant number of women.

"Our corporate sector must take determined steps towards creating women-friendly and gender-sensitive supply chains to empower women in our economy, rather than just accommodate them," he said.

"We need to take the magic of entrepreneurship to – and facilitate the startups of our sisters and daughters at the bottom of the pyramid. The government has a role here, but so do civil society and business and organisations such as FLO," the President added.