Economy

Governor Urjit Patel asked for more powers to oversee PSBs

urjit patel resigns

New Delhi, Jun 12 RBI Governor said that it needs more powers to oversee public sector banks(PSBs), Urjit patel told the parliamentary panel on Tuesday amid mounting bad loans in state-run lenders.

According to sources, the RBI governor faced the tough question from lawmakers on bad loans, bank frauds, cash crunch and other issues. Sources said the governor assured the parliament panel members that steps were being taken to strengthen the system. The panel showed its concern over the bad loans and bank frauds. The combined losses cross to Rs.87,300 crore in 2017-18 fiscal year followed by scam-tainted PNB which took a hit of Rs. 12,283 crore.

The two banks viz Indian bank and vijaya bank out of 21 state-owned banks that posted profits during 2017-18. Indian Bank posted the highest profit of Rs 1,258.99 crore and Vijaya Bank’s profit was Rs 727.02 crore in the fiscal.

Gross non-performing assets (NPA) of the entire banking sector stood at Rs 8.31 lakh crore at end-December 2017.

Sources further said the RBI governor also answered queries regarding the USD 2 billion fraud allegedly committed by diamontaire Nirav Modi and his associates in the PNB.

Some of the committee members including the Congress leader Veerapa Moily tried to know 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.

Urjit said that implementation of Insolvency and banking code(IBC) the situation on the NPA has been improving.

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