Comments
The Estimates Committee of Parliament has asked the PMO, Coal Ministry and various banks to respond to queries on NPAs emanating from former RBI Governor Raghuram Rajan’s report. The committee is headed by veteran BJP leader Murli Manohar Joshi.
Sources in the committee told BusinessLine that the PMO, ministry and lenders have been asked how the NPAs — estimated at ₹9 lakh crore — piled up over the years, what was done to contain them and, most importantly, who should be controlling bank credit.
The committee reportedly also wants the PMO to explain what action the government has taken on a list of large corporate houses that have amassed NPAs. The list was part of Rajan’s submissions to the committee.
The committee had earlier examined former Chief Economic Advisor Arvind Subramanian, who had pointed to to the work done by Rajan in this regard. It then turned to Rajan, who filed a 17-page reply detailing how big business houses were given a free pass by the government and the banking system. Rajan’s report traced the origin of a number of bad loans to 2006-08, when there was “over-optimism” because the economy was strong, and infrastructure projects had been completed on time. This led banks to make mistakes and was followed by the global financial crisis, which contributed as much to NPAs as a “variety of governance problems such as suspect allocation of coal mines”, it said.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.