Indian banks remain healthy, strong and resilient despite a global turmoil, Union finance minister Nirmala Sitharaman told Rajya Sabha on Tuesday, adding that the country’s main anti-money laundering agency’s actions had restored more than ₹15000 crore to public sector lenders.
The country’s pile of bad loans was coming down while banks’ profits were up, the minister said, replying to queries from the opposition during question hour in the upper house.
The Rajya Sabha also discussed the current economic situation of the country after a notice for a short-duration discussion by Trinamool Congress member Derek O’Brien was accepted by the House.
Sitharaman said banks had recovered ₹33,801 crore from wilful defaulters by March 31 this year. More than ₹15,000 crore had been restituted to public sector banks through action and recoveries by the Enforcement Directorate under the Prevention of Money Laundering Act, she added.
“Amidst the global turmoil and sorry state of affairs as regards the banking systems, Indian banks continue to stand healthy, strong and resilient. In our country, not only the non-performing assets (NPAs) are coming down but also the profit margins are going up,” she said.
Responding to supplementary questions on bad loans, Sitharaman said assets worth ₹692.89 crores had been impounded under provisions of the Fugitive Economic Offenders Act, 2018.
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The minister said opposition MPs raising questions on the government’s handling of NPAs ought to first recognise the issue. “The heart of the problem was during the 10 years of UPA rule between 2004 and 2014 when calls were made (to banks) to grant loans to people who weren’t worthy of getting a loan. The burden fell on us to sort the Indian banks out with reforms,” she said.
Answering a query from Congress member Jairam Ramesh, the finance minister said action was being taken on wilful defaulters. “As of March 31, 2023, legal suits were filed for recovery against 13,978 loan accounts. Action under the SARFAESI Act has been initiated in 11,483 cases. FIRs have been filed in 5,674 cases.”
“An aggregate amount of ₹33,801 crore has been recovered. Specific actions through various legal provisions are being taken against defaulters and as a result, money is going back to the banks,” Sitharaman said, adding: “As of December 1, 2023, assets amounting to ₹15,186.64 crores under the PMLA have been confiscated by the ED out of which ₹15,183.77 crores have been restituted to the Public Sector Banks.”
Initiating a discussion on the state of the economy, Trinamool’s O’Brien said: “How the economy looks depends on whose eyes you are looking at it.” O’Brien said while the stock market was booming and the number of billionaires had gone up, India had the world’s largest number of poor people at 23 crore (230 million). “While ration is free, cooking gas costs ₹1000,” he said.
The BJP’s Sudhanshu Trivedi said India had emerged as the world’s fastest-growing economy due to the “systematic policies of Prime Minister Narendra Modi”.
Attacking the government, Congress leader P. Chidambaram asked: “Why is the impact all this scintillating growth not felt on the ground? Why is there high inflation and low employment?”