RBI Governor Urjit Patel today faced tough questions from a parliamentary panel on bad loans, bank frauds, cash crunch and other issues even as he assured the members that steps were being taken to strengthen the system, sources said.
Sources present at the meeting of the Parliamentary Standing Committee on Finance said the RBI Governor expressed confidence of tiding over the crisis regarding non-performing assets (NPAs). Some members of the committee, headed by senior Congress leader Veerappa Moily, sought to know 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.
Striking an optimistic note, 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 Insolvency and Bankruptcy Code, sources said.
BJP MP Nishikant Dubey had questioned on the RBI's schemes like Corporate Debt Restructuring, Sustainable Structuring of Stressed Assets or S4A and Strategic Debt Restructuring, saying that instead of checking loan defaults they resulted in more NPAs.
A number of banking scams have surfaced in the recent past involving state and private lenders such as Punjab National Bank (PNB), ICICI Bank, and so on.