Parliament panel summons heads of 11-public sector banks over mounting bad loans
26 June 2018
Amidst a spike in bad loans with public sector banks the parliamentary committee on finance has summoned the heads of 11 state-owned banks to appraise it about the problems of mounting bad loans and increasing fraud cases, reports quoting sources said.
The bank officials will make presentations before the Standing Committee on Finance, headed by Congress leader M Veerappa Moily, which is looking into 'Banking Sector in India- Issues, Challenges and the Way Forward, including non-performing assets / stressed assets in banks and financial institutions'.
The banks include IDBI Bank, UCO Bank, Central Bank of India, Bank of India, Indian Overseas Bank, Dena Bank, Oriental Bank of Commerce, Bank of Maharashtra, United Bank of India, Corporation Bank and Allahabad Bank.
With mounting non-performing assets (NPAs), which touched Rs8,99,000 crore or 10.11 per cent of total advances of banks as of end-December 2017, the bank officials are expected to respond to the panel’s queries.
Of the total NPAs, the public sector banks accounted for Rs7,77,000 crore.
The spike in NPAs and bad loans comes amidst rising number of frauds, making it a serious cause of concern for the authorities.
The number of frauds reported by banks increased from 4,693 in fiscal 2015-16 to 5,904 in 2017-18. The fraud amount at end-March 2018 was Rs32,361.27 crore, up from Rs18,698.8 crore at the end of 2015-16.
Appearing before the parliamentary panel earlier this month, RBI governor Urjit Patel had he assured the panel members that steps were being taken to strengthen the banking system.