RBI on failure to take preemptive action against bad loans being questioned by Parliamentary panel

28 Aug
RBI on failure to take preemptive action against bad loans being questioned by Parliamentary panel

Parliamentary Standing Commitee headed by senior Congress leader M Veerappa Moily has questioned RBI for failing to take premptive action in checking bad loans in the Banking System prior to the Asset Quality Review (AQR).

 

The committee also observed that RBI needs to find out as to why the early signals of stressed accounts were not captured before the AQR. 

 

The Commitee also includes former prime minister Manmohan Singh as a member.

 

The Committee also wanted to know from the apex bank, the reasons of ever-greening of stressed accounts through restructuring schemes of the Reserve Bank of India. 

 

NPAs in public sector banks (PSBs) increased by about Rs 6.5 lakh crore between March 2015 and March 2018. 

 

"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 capital base of banks without constraining growth of, and equitable access to MSME, Agriculture and Retail segments, credit in India for meeting the needs of a growing economy," the Commitee has observed, according to the sources. 

 

The report of Parliamentary Commiittee is likely to placed in Parliament in winter session.