The Lok Gathbandhan Party (LGP) today expressed grave concern over a massive increase in non-performing asset (NPA) of banks which has now touched more than Rs seven lakh crore. The LGP said bad loan in State Bank of India (SBI) has gone up to Rs 1.86 lakh crore which is the highest among all banks. The party has also demanded penal action against the banking sector officials for creating such a messy situation.
The party spokesman said here on Saturday that bad loan has pushed the country’s economy to the brink of disaster, as all other parameters in the financial sector are in distress. The spokesman said the situation in other public sector banks like Punjab National Bank, (Rs 57,630 crore) and Bank of India (Rs 49,307 crore) is equally worrisome.
The spokesman said the NPA which was 5.7% in 2014-15 and now touched 7.67%. The spokesman said apparently there appears to be no way out as the RBI is simply concerned with waiving them these bad loans. The spokesman said there has been continuous fall in the investment which could be easily assessed from a decline in gross fixed capital formation which is down to 28.9% from 31% in first quarter of the current fiscal year.
The spokesman said scenario has given enough indication about the economy going to red during the last few years. The LGP said the NDA government’s claim of the rosy picture of the economy is absolutely misleading. The LGP that opaque banking system in this connection and clarification on the issue appeared to be quite misleading. Criticizing the banking sector for failing to address the menacing problem of NPA.
the spokesman said the sector in collusion with the politicians has virtually destroyed the entire financial system. The LGP said banking sector reforms were long overdue and there appeared to be no commitment in this direction. The party further said ballooning NPAs problem is the biggest impediment that has choked Indian lenders’ effective operations.
He said banks write-offs are totally non-transparent and public funds are being misused which required fixing of responsibility on the responsible officers. The LGP said over the years the prevailing situation has destroyed credit risk management system and has brought all types of evils and fraud into the system. The LGP said a speedy resolution to the NPA issue has been a big missing link in country’s macro story. The LGP also criticized political parties for silence on the issue.