FM Arun Jaitley meet top bankers to allay fears, discuss bad loans
Finance minister Arun Jaitley on Monday met managing directors of large public sector banks to allay their fears on investigating agencies following an overzealous approach in case of loans turned bad.
A senior bank official said that the meeting was sought by bankers through their association, Indian Banks Association as there was widespread fear among bankers after arrest of former bank officials in case of Kingfisher loans.
“There is almost a banking paralysis in PSBs. We were looking to seek assurance from the finance ministry that there will be no witch hunt,” said the above quoted official.
A finance ministry official however said that meeting was held to take a stock of the banking sector and also steps taken to bring down the non-performing loans.
“A host of issues came up for discussion, including capital needs of banks and implications of good and services tax (GST),” said a finance ministry official, adding that the finance minister also discussed the problems faced by banks in faster resolution of stressed assets.
Non-Performing Assets or bad loans of public sector banks (PSBs) stood at Rs 5.89 lakh crore till September 2016, which estimates put at 20% of the gross advances.
Bankers, who attended the meeting, included Arundhati Bhattacharya, chairman of country’s largest bank, State Bank of India, managing director of Punjab National Bank Usha Ananthasubramanian and IDBI’s CEO Kishor Kharat among others.
In January, Central Bureau of Investigation had arrested former IDBI’s bank chairman Yogesh Agarwal in connection with a Rs 950 crore loan given by the bank to the now-defunct Kingfisher Airlines. The CBI raised queries about how the bank lent money to company that was rated below-investment grade.
Banks Board Bureau (BBB) chairman Vinod Rai had also told ET that there will be no witch hunt against bankers for loan defaults and that investigation agencies cannot take action without merit in cases.
“I am confident that no action would be taken against any banker unless there were very clear indications of malfeasance,” he had said.
A senior bank official said that the meeting was sought by bankers through their association, Indian Banks Association as there was widespread fear among bankers after arrest of former bank officials in case of Kingfisher loans.
“There is almost a banking paralysis in PSBs. We were looking to seek assurance from the finance ministry that there will be no witch hunt,” said the above quoted official.
A finance ministry official however said that meeting was held to take a stock of the banking sector and also steps taken to bring down the non-performing loans.
“A host of issues came up for discussion, including capital needs of banks and implications of good and services tax (GST),” said a finance ministry official, adding that the finance minister also discussed the problems faced by banks in faster resolution of stressed assets.
Non-Performing Assets or bad loans of public sector banks (PSBs) stood at Rs 5.89 lakh crore till September 2016, which estimates put at 20% of the gross advances.
Bankers, who attended the meeting, included Arundhati Bhattacharya, chairman of country’s largest bank, State Bank of India, managing director of Punjab National Bank Usha Ananthasubramanian and IDBI’s CEO Kishor Kharat among others.
In January, Central Bureau of Investigation had arrested former IDBI’s bank chairman Yogesh Agarwal in connection with a Rs 950 crore loan given by the bank to the now-defunct Kingfisher Airlines. The CBI raised queries about how the bank lent money to company that was rated below-investment grade.
Banks Board Bureau (BBB) chairman Vinod Rai had also told ET that there will be no witch hunt against bankers for loan defaults and that investigation agencies cannot take action without merit in cases.
“I am confident that no action would be taken against any banker unless there were very clear indications of malfeasance,” he had said.
