Steps being taken to strengthen banking system, says RBI Guv

| | New Delhi

In the backdrop of cases of banking frauds and rising NPAs, RBI Governor Urjit Patel on Tuesday faced a slew of queries from a parliamentary panel.

The RBI Governor expressed confidence of tiding over the crisis regarding non-performing assets (NPAs) and assured the members that steps were being taken to strengthen the system, sources said.

Some members of the committee, headed by senior Congress leader Veerappa Moily, asked about the reasons for recent instances of ATMs running out of cash and why enough steps were not taken to tackle banking frauds.

Patel told the panel that steps were being taken to strengthen the banking system. “We are confident that we will be able to tide over the crisis,” a source quoted the Governor as saying with respect to the NPA situation.

Patel informed the committee that after implementation of the Insolvency and Bankruptcy Code (IBC), the situation on the NPA front has been improving.

In his last appearance before the panel, Patel was also questioned on loan restructuring programmes, which lead to ever greening of loans, and resolution of defaults under the IBC, sources had said.

There have been rising concerns about bad loans, health of various public sector banks and fallout of the nearly Rs 13,000-crore fraud at the Punjab National Bank.

TMC leader and member of the panel Dinesh Trivedi had said on Monday: “It’s been long time and the RBI has still to come out with amount of the cash returned into system post demonetisation. And the Governor must share these details with the panel and I hope he will do it tomorrow.”

The panel, he had said, would also ask questions about the mounting NPAs in the banking system and the Rs 13,000 crore PNB fraud, which raises doubts about the monitoring system of the RBI.