As a series of bank scams and a mountain of bad loans grip the nation, a Parliamentary panel has taken not of the banking crisis and summoned Reserve Bank of India governor Urjit Patel to answer their queries on the issues. Urjit Patel will face the questions of the Parliamentary panel on May 17. In February this year, a Rs 13,000 crore bank fraud allegedly by diamond czar Nirav Modi rocked the nation, following which many similar cases were uncovered by the investigative agencies.
Besides bank scams, the country is currently reeling under at least Rs 8 lakh crore of bad loans in India’s 21 public sector banks. The allegation of ‘quid pro quo’ by ICICI Bank CEO Chanda Kochhar to loan-defaulter Videocon has created controversy too in past weeks.
The Standing Committee on Finance, headed by veteran Congress leader M Veerappa Moily, today raised several queries related to the banking sector with Financial Services Secretary Rajiv Kumar, PTI reported quoting sources.
While after the PNB-Nirav Modi scam, the government questioned the role of bankers and regulators for failing to notice the scam, Urjit Patel said that the central bank had little regulatory powers over PSBs as compared to private banks.
The RBI recently objected to Axis Bank’s decision to give the fourth three-year term to Axis Bank CEO Shikha Sharma asking banks board to re-consider as NPAs during her tenure rose sharply and the bank was found reporting high NPA divergence. Following RBI’s objection, Shikha Sharma requested a shorter term of six months, which the bank’s board approved.