Issues pertaining to the Nirav Modi and Mehul Choksi scam and the bank loan row involving ICICI Bank CEO Chanda Kochhar's husband Deepak Kochhar were raised at a meeting of a Parliamentary panel, where top bankers were grilled on Monday over the rising NPAs of public sector banks.
Chairman of Indian Bank Association Rajnish Kumar, who is also the SBI Chairman, and representatives of Punjab National Bank including its CMD, Sunil Mehta, appeared before the Parliamentary Standing Committee on Finance headed by senior Congress leader M Veerappa Moily.
They were also asked as to why the NPAs of Indian banks in corporate lending are more than 10% of their total business, while it is just 1.3% in the US, which lends 30 times more loans to corporate than the banks here.
Members asked IBA to come out with a white paper on the steps it has taken to check bad loans.
Stating that bankers must take responsibility if they are autonomous in their functioning, panel members asked them to prepare a road map to deal with mounting bad loans in the system, which touched Rs 8.31 lakh crore at end-December 2017.
Reminding IBA of 19 objectives listed on its website, Trinamool Congress member Dinesh Trivedi asked the IBA Chairman, how much they have stuck to their stated objectives to promote and develop sound and progressive banking principles, practices and conventions in India, and to contribute to the developments of creative banking and also to project a good public image of banking as a service industry and develop good public relations.
Trivedi, according to sources, also asked how a big scam involving an amount of around Rs 11,000 crore in the case of Nirav Modi and Mehul Choksi could take place. The PNB representative sought to explain that it was not a direct loan, but through letters of undertaking and related to only one branch. But the panel members were not convinced.
Saugata Roy from the same party asked the IBA Chairman about the Kochhar case asking how it happened.
Panel members asked the bankers why recapitalisation of loss-making banks should be done with the poor man's money to compensate for the rich stashing away money from banks in form of bad loans.
