M. M. Joshi-led estimates committee asks PMO for Rajan’s list on high-profile NPA fraud cases


Days after news reports emerged that former Reserve Bank of India (RBI) governor, Raghuran Rajan had red flagged “a list of high profile fraud cases of non-performing assets (NPAs) to the Prime Minister’s Office for coordinated investigation”, veteran Bharatiya Janata Party (BJP) leader Murli Manohar Joshi-led estimates committee of the Lok Sabha has send a notice to the Prime Minister’s Office (PMO) asking for sharing the list made by Rajan with Parliament.

The PMO has also been asked to share what action in terms of investigation into the list of companies committing frauds with bank funds has been taken by Modi government.

In a note to the committee, Rajan had said, “I also sent a list of high profile cases to the PMO urging that we coordinate action to bring at least one or two to book. I am not aware of progress on this front. This is a matter that should be addressed with urgency.”

The estimate committee’s notices have also been RBI Governor Urjit Patel, finance secretary Hasmukh Adhia and banking secretary Rajiv Kumar, which ask them to appear before the committee and intimate about the action been taken.

Opposition parties have accused Prime Minister Narendra Modi-led NDA government of favouring a handful of Indian billionaires. Congress President Rahul Gandhi had tagged the Modi Government as “suit boot ki Sarkar.”

In his 17-page note on bank non-performing assets (NPAs) prepared at the request of Joshi, Rajan also warned that MUDRA loans and the credit given through Kisan credit card could lead to the next crisis in India’s banking sector.

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MUDRA loans are the loans given to the unorganised micro and small businesses, which are provided under the Prime Minister Mudra Yojana (PMMY), launched by the National Democratic Alliance (NDA) government in 2015.

As per data from the Micro Units Development and Refinance Agency (MUDRA) website, as much as ₹6.37 lakh crore has been given under the scheme by public and private sector banks, regional rural banks and micro-finance institutions till date.

“Government should focus on sources of the next crisis, not just the last one. In particular, government should refrain from setting ambitious credit targets or waiving loans,” Rajan wrote.

“Both MUDRA loans as well as the Kisan Credit Card, while popular, have to be examined more closely for potential credit risk,” he added.

In March, Minister of State for Finance Shiv Pratap Shukla had admitted in a written reply to the Rajya Sabha that the PSBs had collectively written-off over Rs 1,154 crore in NPAs in the last fiscal till December 31. This was a 103% jump from the amount written off in 2016-17.

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