NPAs up by Rs 6.2 lakh crore under NDA, says Veerappa Moily-headed panel
The committee has questioned RBI for failing to take preemptive action in checking bad loans in the banking system, prior to the Asset Quality Review (AQR) undertaken in December 2015.
Meetu Jain Last Updated: August 28, 2018 | 10:29 IST
Non-performing assets (NPAs) under the NDA went up by Rs 6.2 lakh crore between March 2015 to March 2018, a parliamentary committee report said on Monday. The NPAs of public sector banks led to substantial provisioning of Rs 5.1 lakh crore, the draft report showed.
The committee headed by Veerappa Moily has put the blame squarely at the RBI. The committee has questioned RBI for failing to take preemptive action in checking bad loans in the banking system prior to the Asset Quality Review (AQR) undertaken in December 2015.
According to sources, RBI needs to find out as to why the early signals of stressed accounts were not captured before the AQR. The report is likely to be placed in the Parliament in the Winter Session.
The panel, which includes former Prime Minister Manmohan Singh as a member, wanted to know the reasons of ever-greening of stressed accounts through restructuring schemes of the Reserve Bank of India.
"The issue of rising non-performing assets or bad loans is a legacy issue and role of RBI has not been up to the mark," sources said.
The report has also flagged the issue of low credit to GDP ratio in India which was 54.5 per cent as on December 2017 as compared to 208.7 per cent for China, 170.5 per cent for the UK and 152.2 per cent for the US.