Bulk of NPAs arose out of bank loans provided prior to April 2014: Jaitley
Financing Minister Arun Jaitley made it clear that the government has actually not written off any bank loan and the liability of the customers for repayment of these loans remained.
The bulk of NPAs of banks have actually occurred out of loans provided prior to April 1, 2014, due to aggressive loaning and without proper danger evaluation as well as without being backed by securities, the Arun Jaitley made it clear that the federal government has actually not crossed out any bank loan and the liability of the borrowers for payment of these loans remained.”Something is clear that there has actually been an aggressive loaning practice and sometimes laxity and at times absence of risk assessment as far as grant of loans are concerned. And, that is why a large variety of these loans ended up being NPAs. Many of them are not backed by sufficient securities likewise,” he informed the Upper House throughout the Concern Hour.”Qua the borrower, the liability stays. But the banks alter the
identity of the loan to make sure that income tax relief is sought by the bank. One must clear this misunderstanding from the mind that the government or the banks have actually waived of Rs 55,000 crore,” he informed the members. To a question by UNFORTUNATE member Naresh Gujral on why a forensic audit of big loan defaulters can not be purchased, Jaitley said”you can not have a fishing inquiry into a deal to learn what failed”. Whenever particular facts have
concerned discover as far as banking industry is concerned, he said both the regulator and banks and the investigative agencies have actually been appropriately doing something about it from time to time. Noting that the NPA dispute will endless
, former Financing Minister P Chidambaram asked whether carrying out loans as on March 31, 2014, have become non-performing later on and whether that is a rip-off. Handling record the minister’s claim that earlier the regulation was lax and the possession regulation worth has actually now been made more stringent, he asked whether the minister has the information now or will he provide it to your house later on as to how lots of loans given by banks after April 1, 2014 have become NPA today.” Obviously, the question does not relate
to loans given with regard to particular dates. It is definitely clear that bulk of these NPAs have developed out of loans that were provided prior to April 1, 2014, “Jaitley stated in reply. In his written reply, Jaitley said as an outcome of transparent recognition of NPAs, the NPA amount of public sector banks rose from Rs 2.16 lakh crore (domestic )as on March 31, 2014 to Rs 7.33 lakh crore (global) as on September 30, 2017. Based on the list provided to your house, Jaitley said the gross NPAs(worldwide )of State Bank of India is the highest at Rs 1,86,115 crore, followed by Rs 57,630 crore of Punjab National Bank and Bank of India of Rs 49,307 crore as on September 30 . Against this, the SBI has gross NPAs(domestic
)of Rs 76,030 crore, followed by PNB with Rs 18,611 crore and Main Bank of India with Rs 11,500 crore and Rs 10,274 crore of Bank of India, as on March 31, 2014. Earlier, while responding to Neeraj Shekhar(SP)who asked if federal government would buy a probe into the supposed rip-off on NPAs during UPA, he said in 2015, the Reserve Bank of India evaluated asset quality of all banks and discovered lots of such properties revealed as carrying out possessions in the accounts had actually been non -performing and should be accounted as NPAs. This, he said, is the first reason for increase in NPAs and the second factor for the increase is the interest included to it. Jaitley stated the banks did aggressive loaning and some accounts defaulted willfully as
they did not make correct threat assessment.” Whatever action is to be taken according to law is being taken as well as criminal liability has been fixed.
The process of healing in cases of company losses is likewise being brought out,”he said. The FinanceMinister likewise made it clear that neither the federal government, nor the banks waive off any corporate loans.
“Nobody waives the loan. After four years when the loan is non-performing and its recovery is bleak, then its category is changed, but the recovery liability stays,” he said.
When CPI’s D Raja asked why the federal government does not expose the names of wilful defaulters and why it can not treat it as a criminal offense and continue appropriately, Jaitley stated the names of wilful defaulters are regularly offered by the banks themselves.
“Let us eliminate this misunderstanding. As far as normal banking transactions are concerned, there is a specific type of privacy. With regard to wilful defaulters are worried, there is a different classification with regard to which no secrecy is preserved,” he stated.