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Parliamentary panel asks banks to come up with roadmap on NPAs

Author: IANS/Monday, June 4, 2018/Categories: Banking & Financial Services

Parliamentary panel asks banks to come up with roadmap on NPAs

New Delhi, June 4 - Members of the Parliamentary Standing Committee on Finance on Monday asked banks to come out with a roadmap to deal with non-performing assets (NPA) and suggested their redefining and classification of the bad loans.

At a meeting of the Committee here, the members also asked top bank officials and members of Indian Banks' Association about the "banking scams" including the multi-crore bank fraud in the Punjab National Bank involving jeweller Nirav Modi.

The meeting was held almost a week before the Reserve Bank of India Governor Urjit Patel is scheduled to appear before the Committee on issues related to the banking sector including NPAs and stressed assets.

Sources said the members asked the banking sector representatives about the challenges they faced and changes they require to prevent frauds.

SBI Chairman Rajnish Kumar and Punjab National Bank Chairman Sunil Mehta were among those who attended the meeting.

On NPAs, some Committee members said that there cannot be one category and there should be classification in terms of willful defaulters and non-willful defaulters.

The members said that NPAs can arise due to government inactiveness and other factors and there was a need to make such distinction.

The banks were asked to come out with a roadmap with redefining of NPAs.

Sources said the issue of merger of banks also came up at the meeting with some members suggesting the need to be extra careful as it involved "different cultures" besides "chemistry".

They said the proposal of merger of different banks was not the same as merger of associates of State Bank of India.

Sources said the PNB chief was asked about the multi-crore fraud involving jeweller Nirav Modi.

The sources said that bank officials told the members that scams were being dealt with separately and did not represent a systems failure.

The officials also said that there has not been a lack of confidence among people in relation to the public sector banks.

A Trinamool Congress member raised issues concerning autonomy of banks and asked if the banks were responsible to people or to the government.

Sources said during his appearance before the panel, Patel is likely to be asked about the bank frauds, including Nirav Modi case and better regulation of banks.

Patel had said earlier this year that the RBI's regulatory powers over PSBs were weaker than those over the private sector banks.
 

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rajyashree guha

IANS

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