PSU banks themselves responsible for NPAs, not govt: FM
PrintListen to this Article
Blaming "tardy" state-run banks for high level of non-performing assets, Finance Minister P Chidambaram Saturday said banks' boards and not the government should be held responsible for the situation.
"If the bank boards cannot perform their duty, blame should stop with the bank boards and not with the government," he said at a panel discussion at an event to commemorate NSE's 20th anniversary here.
He acknowledged that the government has a nominee director in every public sector bank, but pointed out the roles of the independent directors, full-time directors, chairmen and managing directors and senior bank management.
During his three stints in the finance ministry, running into eight years, he has never interfered with the working of a bank, Chidambaram said.
"NPAs are high because the recovery measures are soft. Bankers are being tardy and to some extent soft on recovery. We have failing companies and prosperous promoters," he said.
Gross NPAs of banks crossed 4 percent as of the September quarter at Rs 2.37 trillion and are projected to cross 4.4 percent or Rs 2.9 trillion by the end of the fiscal, according to a report by rating agency Icra.
Most NPAs are being generated by the state-run banks. United Bank of India has an NPA level of over 7 percent, while SBI has over 5 percent NPAs.
The minister also said that the RBI and the government have taken serious note of the issue and asked banks to expedite recoveries aggressively. State Bank has set up a separate vertical to tackle NPAs, he noted.
Chidambaram also said it is not fair to compare NPAs in the current context with the levels of the past, as in 2004, when the numbers were lower.
On capital infusion in state-run banks, Chidambaram said the infusion will continue even as bad assets rise because of the rate at which the overall assets of the banks are growing. (PTI/Zee)
Category : Banking | Comments : 1 | Hits : 375
The Financial Intelligence Unit-India (FIU-IND), in furtherance of the powers conferred upon the Director FIU-IND under Section 13(2)(d) of the Prevention of Money Laundering Act (PMLA), 2002, has imposed a monetary penalty of Rs. 5,49,00,000 (rupees five crore forty nine lakh) on Paytm Payments Bank Ltd with reference to the violations of its obligations under the PMLA read with the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (PML Rules) issued thereunder and applicable ...
The government on Monday informed the Lok Sabha that all Scheduled Commercial Banks have written off nearly Rs 10.6 lakh crore in the last 5 years, out of which nearly 50 per cent belong to large industrial houses. It also said that nearly 2300 borrowers, each having a loan amount of Rs 5 crore or more, wilfully defaulted around Rs 2 lakh crore. As per the Reserve Bank of India (RBI) guidelines and policy approved by bank boards, NPAs, including those in respect of which full provisioning has...
The government has cleared the extension of tenure of managing directors of two public sector lenders -- Bank of Maharashtra (BoM) and Central Bank of India. According to sources, Appointments Committee of the Cabinet (ACC) has approved extension of term of office of A S Rajeev, MD and CEO of BoM, for six months till his superannuation. Besides, sources said, ACC has extended the term of M V Rao, MD and CEO of Central Bank of India, till July 31, 2025.
The Central Bureau of Investigation (CBI) has started probe into the multi-crore banking fraud in which a former Punjab National Bank (PNB) employee, M.P. Rijil, allegedly swindled ?21 crore from multiple bank accounts, including the eight accounts maintained by the Kozhikode Corporation. The case is being investigated by the Kochi unit of the CBI in compliance with an earlier order issued by the Kerala High Court. The case, which was initially investigated by the Kozhikode Town poli...
The Enforcement Directorate (ED) on Saturday arrested two promoters of a Chandigarh-based pharma company, who are also the co-founders of the Sonepat-based Ashoka University, and a chartered accountant in a money-laundering probe linked to an alleged bank fraud. Official sources said the central agency also continued with its searches against the group for the second day, including at the Ashoka University's corporate and registered offices in Delhi and campus in Sonepat. Parabolic Dru...
Comments
CA.Subhash Chandra Podder
16-Dec-2013 , 05:46:28 pmFM'S statements is correct " Responsibility is to the bank managements " for rising NPA. as the recovery is not properly done by the Banks. Why FM is blaming to banks now? No proper audit is done. Need Proper Audit at every Bank Branches . CA. Subhash Chandra Podder, FCA Kolkata 16/12/2013