PAC calls heads of public sector banks to discuss NPAs, Mallya loansHeads of public sector banks will soon appear before the Public Accounts Committee (PAC) to explain issues relating to NPAs, including the loans given to Vijay Mallya-led firms.
Heads of public sector banks will soon appear before the Public Accounts Committee (PAC) to explain issues relating to NPAs, including the loans given to Vijay Mallya-led firms.
The move comes amid concerns over mounting bad loans.
"To begin with, the panel has called CEOs of Indian Bank and Indian Overseas Bank at its meeting in Chennai on February 27," senior Congress leader and PAC Chairman K V Thomas was quoted as saying by PTI.
Besides, representatives of the Finance Ministry will also be present at the discussion over issue of bad debts in the public institutions.
The PAC will be holding such meeting separately with other lenders on the rising NPAs, which has become a major source of concern for the public sector banks, Thomas said.
The PAC is learnt to have already dispatched a questionnaire to the heads of banks to seek details about bad debts and major defaulters.
The questions asked are on quantum of the bad debts, the reasons for increase in such loans, steps taken to recover them and also the factors delaying the recovery.
As on September 30, 2016 gross NPAs of public sector banks rose to Rs 6.3 lakh crore as against Rs 5.5 lakh crore at the end of the June quarter.
This works out to an increase of Rs 79,977 crore on quarter on quarter basis.
A consortium of 17 lenders to Kingfisher, including the State Bank, has struggled to recover close to Rs 6,000 crore loan given to the defunct Kingfisher Airlines.
The liquor baron quietly flew to London in March last year, chased by banks as well as investigating agencies over allegations of financial fraud.
To recover some of the money, the SBI has tried to auction Mallya's property. Among the assets pledged as collateral is the flamboyant businessman's luxurious Kingfisher villa in Goa, which the bank has yet to find a buyer for.
Recently, former top officials of IDBI Bank were arrested by CBI in connection with Kingfisher Airlines case, putting bankers to become extra cautious resulting in slowdown in processing of loan proposals.
During the meeting on February 27, the PAC will also undertake performance review of import and export trade facilitation through Customs Port and Special Economic Zones where representatives of Revenue Department will also be present.
Besides, it will also discuss performance audit on assessment of assessees in pharmaceuticals sector for the year ended March 2014.
(With PTI inputs)