Govt launches counter attack on Congress over banks NPA issue

Launching a counter-attack on the Congress over bank NPAs, Union minister Piyush Goyal today said it is a "legacy issue" furthered by "indiscriminate and reckless" lending during the previous UPA regime.
"The Prime Minister yesterday said the huge pile up of non-performing assets (NPAs) on (public sector) banks' balance sheet is the biggest scam of this country.
"However, some Congress leaders have tried to paint an entirely wrong picture citing data from the Reserve Bank that bad loans of banks have jumped three times during BJP led NDA government in last three years," the railways minister told reporters here today.

Rejecting the insinuations by the Congress, Goyal said it was during 2008-2014 of the Congress-led UPA government that banks were pressurised politically to give loans to big corporates and industrialists on indiscriminate and reckless manner without even doing the proper due diligence.
"NPA
is the biggest scam of the previous government. This is bigger than the Commonwealth, 2G and coal scam. Those who shouldn't have remained silent then have spoken now. NPAs are the biggest liability transferred to us by the previous government," Prime Minister Narendra Modi yesterday said while addressing industry body FICCI's annual meeting here.

The Congress today alleged that non-performing assets of public sector banks have increased by Rs 5.05 lakh crore in 42 months of the NDA government and asked whether the prime minister is ready for a probe into it by an independent agency.

Goyal said gross advances by public sector banks jumped over nearly seven-times in nine years from Rs 8.08 lakh crore in March 2005 to Rs 52.15 lakh crore by March 2014, however, the GDP didn't grew at a similar pace, meaning there was reckless and indiscriminate lending due to political pressures.
"There were aggressive lendings without assets, covenants were relaxed for some special promoters, those accounts that were actually stressed were hidden besides being restructured and given fresh loaning leading to ever-greening of such accounts," Goyal said.
Stressed assets or bad loans of public sector banks (PSBs) were Rs 7.33 lakh crore as on June 2017, against Rs 2.75 lakh crore as on March 2015.

Goyal alleged that the BJP government is carrying "this legacy" problem created by the Congress-led UPA regime before coming to power in mid-2014.
The minister said the government has every intent to solve this banking sector crisis.
RBI's Asset Quality Review (AQR) mechanism, initiation of Insolvency and Bankruptcy Code (IBC) and referring insolvent cases under the National Company Law Tribunal to recover bank sector dues are the steps that the government has already taken, he added.
Revamping the banking sector through Mission Indradhanush and recapitalisation of banks are among other key steps to strengthen the banks.
Finance Minister Arun Jaitley in October had announced a Rs 2.11 lakh crore two-year road map to strengthen PSBs, reeling under high NPAs.