This Article is From Jun 04, 2018

ICICI Bank-Videocon Case: Parliamentary Panel Quizzes Bankers On Alleged Nepotism

IBA deputy chairman and SBI chief Rajnish Kumar and PNB MD Sunil Mehta briefed the panel on various aspects of NPAs and banking frauds.

ICICI Bank-Videocon Case: Parliamentary Panel Quizzes Bankers On Alleged Nepotism

The RBI Governor Urjit Patel too will brief the committee later this month

New Delhi: The Parliamentary Panel posed queries before Indian Banks Association (IBA) members including State Bank of India (SBI) chief Rajnish Kumar and PNB managing director Sunil Mehta on the alleged "nepotism" by ICICI managing director and CEO Chanda Kochhar in a loan to Videocon Group. The panel also asked the IBA to make a roadmap for addressing the issue of mounting non performing assets (NPAs). During a meeting between the bankers and the Parliamentary Standing Committee on Finance, headed by Lok Sabha MP Verappa Moily, it was asserted that the corporate entities should not be painted with a same brush as all of them are not wilful defaulters, sources told Press Trust of India.    

The total amount of non-performing assets (NPAs) touched Rs 8.31 lakh crore at end-December 2017.

Among others, IBA deputy chairman and SBI chief Rajnish Kumar and PNB managing director Sunil Mehta briefed the panel on various aspects of non-performing assets (NPAs) and banking frauds.

IBA's senior advisor Alok Gautam was also present in the meeting, sources added. The Reserve Bank of India (RBI) Governor Urjit Patel too will brief the committee later this month.

Sources said that some of the members had questions on allegations against Kochhar. One of the member wanted to know if "nepotism" was also going on in private sector banks.

The ICICI Bank has already constituted an independent enquiry into the allegations of quid pro quo against Kochhar in providing loan to Videocon Group.

Sources further said TMC MP and member of the panel Dinesh Trivedi wondered why pubic money was being used to recapitalise the state-owned banks which are losing money on frauds and defaults by corporate entities.

The IBA members quizzed the bank officials whether "aggressive lending" during the successive UPA governments was the reason for the mounting NPAs in the banking system, especially in state-owned lenders. Gross NPAs of state-owned banks had crossed Rs 7.77 lakh crore at the end of December 2017, according to official data.

The ruling BJP's MP Nishikant Dubey said Indian banks need not adhere to international capital adequacy norms (Basel-III) as it is leading to more provisioning of capital, sources said. The committee was earlier briefed by Financial Services Secretary Rajiv Kumar about issues related to the banking sector. Former Prime Minister Manmohan Singh also attended the meeting.