New Delhi [India], May 31 (ANI): The bad loans crisis during the Congress-led UPA tenure stifled the credit requirements and dreams of crores of aspirational Indians who wanted to establish start-ups and expand small businesses, alleged Finance Minister and senior BJP leader Nirmala Sitharaman.
In a long thread of posts on her X timeline, she launched an attack on the Congress party and its allies, alleging that the UPA government chose to favour dynasts and cronies while leaving a large chunk of Indians in the lurch.
“When the Modi government took charge, these cronies fled, fearing prosecution,” she wrote in her four-part X post, in an apparent reference to fugitives that have flown out of the country since Prime Minister Narendra Modi came to power.
Further, targeting her party BJP’s principal Opposition party Congress, Sitharaman said those who take credit for the nationalization of banks kept the nation’s poor and middle class unbanked for decades “while their leaders and allies climbed the ladders of corruption.”
According to her, it was under PM Modi that the banking sector turned around for the better.
She said that it is her government that brought in comprehensive and long-term reforms. “Our reforms addressed credit discipline, recognition and resolution of stress, responsible lending and improved governance.”
She said her government “replaced political interference in banks with professional integrity and independence.”
“Our govt, in 2015, issued a framework for the timely detection and investigation relating to large value bank frauds.”
She listed out how her government brought in the Insolvency and Bankruptcy Code (IBC) for faster recoveries; the Fugitive Economic Offenders Act of 2018 was enacted for the seizure of fugitive economic offenders’ property.
Specialised monitoring agencies were deployed for effective monitoring of loans above Rs 250 crore.
Sharpening her attack further, she said the Opposition is habituated to spreading lies. She adds that the Opposition wrongly claims that there has been a “waiver” of loans given to industrialists.
“Despite claiming to be “experts” in finance and economy, it’s a pity that opposition leaders are still unable to distinguish between write-offs and waivers. After the ‘write-offs’ as per RBI’s guidelines, banks actively pursue the recovery of bad loans. And, there has been no “waiver” of loans for any industrialist. Between 2014 and 2023, banks recovered more than Rs 10 lakh crores from bad loans.”
She put out figures that the Directorate of Enforcement (ED) has investigated around 1,105 bank fraud cases, which resulted in the attachment of proceeds of crime amounting to Rs 64,920 crores.
As of December 2023, assets amounting to Rs 15,183 crores have been restituted to the government-owned banks.
“There has been no leniency in recovering bad loans, especially from large defaulters, and the process is ongoing,” she assured.
As per the finance minister, the ‘seeds’ of the NPA crisis were sown during the Congress-led UPA era through ‘Phone Banking’ – a term used to allege that politicians of those times had favoured businesses while disbursing out loans.
“…loans were given to undeserving businesses under pressure from UPA leaders and party functionaries,” Sitharaman wrote.
“Under the UPA, obtaining loans from banks often depended on powerful connections rather than a solid business proposition. Banks were forced to neglect proper due diligence and risk assessment before sanctioning these loans. This led to a massive increase in Non-Performing Assets (NPAs) and institutionalised grafts.”
“Many banks hid and avoided reporting their bad loans by ‘evergreening’ or restructuring them,” she added.
Against that backdrop of high bad loans and the health of banks in disarray, banks had then become reluctant to lend to new borrowers, especially MSMEs.
“From having a ‘Twin Balance Sheet Problem’, we now have a ‘Twin Balance Sheet Advantage’,” she said.
During 2023-24, Public Sector Banks recorded the highest-ever aggregate Net Profit of Rs 1.41 lakh crore, almost four times higher than Rs 36,270 crore in 2014.
Net NPAs of public sector banks declined to 0.76 per cent in March 2024 – from 3.92 per cent in March 2015, and from a peak of 7.97 per cent in March 2018.
Their gross NPA ratio declined to 3.47 per cent in March 2024 – from 4.97 per cent in 2015 and from a peak of 14.58 per cent in March 2018. (ANI)
Disclaimer: This story is auto-generated from a syndicated feed of ANI; only the image & headline may have been reworked by News Services Division of World News Network Inc Ltd and Palghar News and Pune News and World News
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