NPAs Up By Rs 6.2 Lakh Crore Under NDA Rule, Says Parliamentary Committee
The Logical Indian Crew India
August 28th, 2018 / 3:00 PM
A parliamentary committee report on August 27 said that non-performing assets (NPAs) under the present NDA government has gone up by Rs 6.2 lakh crore between March 2015 to March 2018. Reportedly, the committee headed by Veerappa Moily has put the blame on the Reserve Bank Of India.
The Veerappa Moily Committee Draft Report
The draft report of the committee stated that the NPAs have further compelled the government to provide Rs 5.1 lakh crore to the public sector banks, reported Times Now. Reportedly, the committee which includes former Prime Minister Manmohan Singh as a member has also questioned RBI for failing to take prior action in checking bad loans before the Asset Quality Review (AQR) undertaken in December 2015.
According to sources, the RBI needs to find out as to why the early signs of the stressed accounts were not taken into consideration before the AQR, reported Live Mint. Moreover, the report also highlighted the issue of low credit to GDP ratio in India, which was 54.5% as of December 2017, against much higher scores of UK, USA and China.
Sources while quoting the report said, “The RBI should examine the asset to capital leverage ratio in other countries vis-à-vis India and, keeping in view India’s relatively low credit-to-GDP ratio, identify ways to improve the capital base of banks without constraining growth of, and equitable access to MSME, agriculture and retail segments.”
It also highlighted various other measures that have led to transformative change in the creditor-debtor relationship and clean, responsible banking which include enhanced provisioning, massive recapitalisation, transparent recognition of NPAs post-AQR, enactment of Insolvency and Bankruptcy Code, debarment of connected parties and examining of all NPA accounts exceeding Rs 50 crore from the angle of possible fraud among others, reported Live Mint.
Reportedly, the draft report is most likely to be placed in the Parliament during the Winter session.
Written by : Sromona Bhattacharyya
Edited by : Abhinav Joshi