As opposition stalls Parliament over PNB Fraud, BJP blames ‘so-called’ economist Manmohan Singh for banking mess

By: |
March 5, 2018 5:04 PM

The BJP, once again, blamed the UPA government for the banking mess, saying that the banking system derailed under the leadership of "so-called" economist and Prime Minister Manmohan Singh.

As opposition stalls Parliament over PNB Fraud, BJP blames ‘so-called’ economist Manmohan Singh for banking mess (Image: FE)

The second half of the Budget session began with a stormy session on a number of issues including the alleged Rs 12,700 crore Punjab National Bank fraud by Nirav Modi, resulting in the adjournment of both the Houses, but the BJP, once again, blamed the UPA government for the banking mess, saying that the banking system derailed under the leadership of “so-called” economist and Prime Minister Manmohan Singh.

Addressing a press conference on Monday, Law and IT Minister Ravi Shankar Prasad said, “Under the so-called economist Prime Minister Manmohan Singh, the entire banking system was derailed because of intervention and pressure.”

“Many times the UPA did not allow correct data to be entered into bank records. Advances (to banks) rose during UPA but were not recorded in the books,” he added. The BJP leader was addressing the press conference on the party’s win in the North-East states.

The banking crisis including frauds, stressed assets and capital shortage continue to pose problems for India and the BJP, its leaders, Finance Minister Arun Jaitley and Prime Minister Narendra Modi have blamed the UPA government for the twin balance sheet problem several times in the past few months.

In the first half of Budget session, Narendra Modi, while replying to the Motion of Thanks to the President’s Address in the Lok Sabha earlier this month, said that the NPA crisis was a sin of the Congress. “Ye NPA aapka paap hai,” he said, adding that the actual NPAs were 82% and not 36% and the 100% blame for it belonged to the Congress.

The BJP government under the leadership of Narendra Modi claims to be committed to resolving the banking crisis, which, indeed, have been witnesses in past few months. To solve the twin balance sheet problem of the banking system, both the Reserve Bank of India and the government have taken several steps.

First, it was the passage of the Insolvency and Bankruptcy Code (IBC) in 2016 followed by identification of about 40 accounts with big NPAs for insolvency proceedings. Meanwhile, the government announced a massive Rs 2.11 lakh crore of bank recapitalisation plan along with immediate plugging of a loophole in the IBC.

The Union Cabinet chaired by Narendra Modi passed an ordinance to bar wilful defaulters, defaulting promoters and related individuals/entities from bidding during insolvency auction. The amendment via the ordinance was passed during the winter session of the Parliament.

The latest development has come from the RBI, which earlier this month, subsumed 28 schemes of stressed asset management and introduced uniform framework with a 180-day timeline.

The government currently is on backfoot on the recent PNB fraud as it went undetected for many years, including four years under Narendra Modi and through the bank recapitalisation exercise in which the bank was infused with over Rs 5,000 crore of capital.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1IMD Forecast: Normal, dispersed monsoon seen
2Adar Poonawalla urges US to lift ban on jab material exports
3Indian economy in better shape compared to previous COVID-19 wave: CEA