‘Hope banks had gumption to tell Modi how his government destroyed them’

Our Bureau New Delhi | Updated on July 29, 2020

Randeep Singh Surjewala, Media in-charge, INC

Commenting on Prime Minister Narendra Modi’s meeting with leaders of banking sector on Wednesday, the Congress hoped that the banks had the gumption to tell the PM how his government has destroyed the banking sector and financial institutions.

The Party’s media in-charge Randeep Singh Surjewala said even if the banks maintained a studied silence in the face of Prime Minister’s aversion to hear the honest uncomfortable truth, RBI’s reports and statements by former RBI Governors reflect the miserable state of India’s financial system and the banking sector.

Surjewala said in March 2013-14, NPAs were ₹ 2.16 lakh crore (3.8 per cent of total loans). “NPAs increased to ₹9.35 lakh crore as on September 2019 (to 9.1. per cent). RBI’s July 2020 ‘Financial Stability Report’ reflects that bad loans in the banking system can reach a whopping 14.7 per cent, a 20 year high. How did it balloon so much?,” Surjewala asked.

Citing the All Indian Bank Employees Association's list of l2,496 wilful defaulters, he said default amounts is totalling up to a whopping ₹1.47 lakh crore . “As such huge amounts are being technically written off by the Modi Government there is zero effort, to investigate or punish the defaulters. A glaring example is the lead bank SBI’s record of recovering less than one per cent of the write-offs each year. As per reports, SBI had to write off ₹1.23 lakh crore while collecting a meagre ₹8,969 crore in eight years.

When the RBI under Dr. Raghuram Rajan and later under Urjit Patel wanted to implement stricter rules to recover loans from defaulters, they were removed /forced to resign as RBI Governors by the Modi government,” he alleged.

He said the merger of banks was a flop show. “10 PSU Banks were merged together in the hope of covering up the bad loans. Two bad banks merging does not make one ‘Good Bank’. It only makes a larger bad bank,” he said.

Published on July 29, 2020

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