Jaitley locks horns with Chidambaram over NPAs in RS

Finance Minister Arun Jaitley and his predecessor P Chidambaram on Tuesdsy locked horns in Rajya Sabha over the issue of non-performing assets (NPAs).

The face-off took place during the Question Hour, when Jaitley was answering a question on writing off bad loans of PSBs. Chidambaram then asked him if he would furnish details of the loans that have turned into NPAs after April 1, 2014, the financial year in which the BJP came to power.

Chidambaram had started his question saying the NPA debate will never end and said, "In the Asset Quality Review, the RBI finds that the loan is non-performing. The minister says that earlier, the regulation was relaxed and the Asset Quality Review made the regulations stricter. I accept that... My question now is, does the minister have data now or if he does not have, will he furnish it to the House, how many loans given by banks after 1/4/2014 have become NPA today?"

"Obviously, the question doesn't relate to loans given with regard to particular dates, but it is absolutely clear that a bulk of these NPAs have arisen out of loans, which were given prior to April 1, 2014," Jaitley said, in an apparent reference that NPAs were created during the UPA rule.

Following this, Akali Dal MP Naresh Gujral asked, why shouldn't the government order a forensic audit of, at least, 10 largest NPAs of each bank. "There has been aggressive lending practice and, at times, laxity and, at times, lack of risk assessment as far as grant of loans are concerned and that is why, a very large number of these loans became NPAs. And many of them are not backed by adequate securities also. But then, you cannot have a fishing and roving inquiry into a transaction to find out what went wrong," Jaitleysaid.

Whenever specific facts have come to notice, as far as banking industry is concerned, he said both the regulator and banks, and the investigative agencies have been accordingly taking action.