The PAC, headed by Congress lawmaker K V Thomas, is keen to find out the details of huge loans given by the banks to corporates including the basis on which such favours were extended.
The Public Accounts Committee of Parliament has summoned top officials of Indian Bank, Indian Overseas Bank, Allahabad Bank and UCO Bank to discuss their major loan defaulters and find out what action is being taken to recover the tax payer’s money.
According to sources, the PAC, headed by Congress lawmaker K V Thomas, is keen to find out the details of huge loans given by the banks to corporates including the basis on which such favours were extended. The panel will further probe if the loan amount has been diverted by the defaulters for projects other than what they told the banks.
With banks not forthcoming in parting with information about the big defaulters, the PAC has decided to go beyond the national capital and meet the bank officials in Chennai and Kolkata.
As Indian Bank and Indian Overseas Bank are headquartered in Chennai, the officials will appear before the PAC in the Tamil Nadu capital on February 27. Later, the representatives of the Allahabad Bank and the UCO Bank will appear before the panel in Kolkata on March 1.
Local officials of the finance ministry will also be present at the two meetings to hold informal discussions with the panel members.
Sources said the PAC, which usually reviews the reports of the Comptroller and Auditor General of India presented to Parliament, has identified bad debts or NPAs of public sector banks as a major task before it. The Chennai and the Kolkata visits mark the beginning of a sustained effort by the panel to address the issue, said the sources.
According to banking sector sources, any %age of bank NPA over 5% presents an alarming situation and all the four banks that have been summoned by the PAC show that the problem has grown significantly with them.
According to data available as on December 31, 2016, the Indian Bank had gross NPA of 7.69% and net NPA of 4.76%, Indian Overseas Bank had gross NPA of 22.42% and net NPA of 14.32%, Allahabad Bank had gross NPA of 12.51% and net NPA of 8.65% and UCO Bank had gross NPA of 17.18% and net NPA of 8.99%.
In the PAC meeting on February 10, members had expressed concern over the high%age of NPAs in public sector banks while pressing financial services secretary Anjuly Chhib Duggal to name the big defaulters.
When some members pointed out that NPAs of the public sector banks had risen to 12%, the financial services secretary replied that this was due to bad debt getting properly defined and now showing in the books.
TMC member Sukhendu Shekhar Roy had expressed concern that while non-performing assets of corporates seldom find mention in public, the debt of common man is disclosed easily. Duggal had said the government will try to address the issue.
After the Economic Survey 2016-17 suggested the establishment of a "bad bank" to deal with the NPAs, Finance Minister Arun Jaitley had said it could be a possible solution to deal with the festering problem.
Illustration: Uttam Ghosh/Rediff.com.