A Parliamentary panel examining the issue of challenging before the Indian banking systems, including the rising level of NPAs and stressed assets, has called representatives of the Indian Banks Association and public sector banks (PSBs) on June 4.
The Department Related Standing Committee of Parliament on Finance headed by senior Congress leader M Veerappa Moily has been examining the issue for some time which was in spotlight recently, in the wake of the Nirav Modi-Mehul Choki scam involving fraudulent transactions of over Rs 13,000 crore from Punjab National Bank.
Incidentally, the committee has also called representatives of PNB in June. A source in the panel said that during the deliberations, questions will be asked about how the scam took place and how it went ignored for such a long time.
In an earlier meeting on April 17, the panel had quizzed Financial Services Secretary Rajiv Kumar regarding the new cases of bank frauds coming up and repeatedly asked him what the government was doing to arrest the trend.
Rising number of NPAs has been an area of concern and the issue has been thoroughly deliberated in at least two Parliamentary committees - the committee on Finance and Public Accounts Committee, both chaired by senior Congress leaders.
The Finance panel, which is also deliberating on the way forward to the problem of NPAs and stressed assets in banks and financial institutions, had earlier asked the government about the sharp difference in the NPA ratio of private sector banks and public sector banks. Representatives of the Finance Ministry had then given a detailed briefing to the panel on the NPA issue.
The panel has also asked RBI Governor Urjit Patel to appear before it on June 12. Sources in the panel say, the RBI Governor wanted to appear on June 11, but was asked to stick to the schedule. Earlier, Patel was to appear before the panel on May 17, but it was later advanced to June 12.
The Committee has sought a written response from the RBI on the issue. After perusing through the written submission of the RBI over the NPA issue, Public Accounts Committee, in 2016, had dwelt at length over the idea of “naming and shaming” the big defaulters.
Some members in the PAC had then suggested measures like putting out the names and photographs of big borrowers defaulting on their payments as a possible solution to the rising NPAs in PSBs.