The debate over the non-performing assets in the Rajya Sabha escalated to a new level on Tuesday with Finance Minister Arun Jaitley saying that bulk of NPAs was due to the loans given before NDA government coming to power.
Jaitley was answering questions on various financial issues, including NPAs, bank loans, loan waivers, and the Panama Papers and Paradise Papers cases in the Rajya Sabha.
"I am asking a very specific question, how many loans given to banks after 1.4.2014 have become Non-performing assets(NPA) today?" former finance minister P Chidambaram asked.
"It is absolutely clear that the bulk of the NPAs today have arisen out of loans which were given prior to 1.4.2014," Jaitley said in Rajya Sabha
The baking sector is under severe stress due to the NPAs. The government had in August 2017, passed the Banking Regulation (Amendment), Bill. The bill was aimed at empowering the RBI to issue directives for resolution and appoint authorities or committees to advise the banking companies on stressed asset resolution.
Non-performing assets of banks had risen to over Rs 9 lakh crore and it had become necessary for the RBI to intervene.
The Reserve Bank of India had in June 2017, identified 12 of the largest loan defaulters and will order lenders to start bankruptcy proceedings against them to clear bad debt plaguing the economy.