Chidambaram slams govt for its 'heavy-handed' approach towards NPA

New Delhi, Sep 21 Senior Congress leader P Chidambaram Friday slammed the Modi government for its banking policy, saying because of its "blundering" approach towards non-performing resources, banks have no cash to loan.

In a series of tweets, the former finance minister also claimed that though export credit had declined from Rs 39,000 crore in June, 2017, to Rs 22,300 crore in June, 2018, the government thinks that it is taking steps to boost exports.

"In a climate of suspicion and vendetta, the only thing a banker looks forward to is the date of retirement.

"Thanks to the NDA government's heavy-handed approach to the NPA issue, banks have no money to lend and bankers have no mind to lend," he said.

Chidambaram said the report of the United Nations Development Program (UNDP) and the Oxford Poverty and Human Development Initiative has said 27.1 crore people in India were lifted out of poverty between 2005-06 and 2015-16 and of those 10 years, the UPA was in the government for eight years.

"For the BJP government, its bloggers and bhakths, each issue is a 'legacy' issue. Wish to advise them that lifting 27.1 crore people out of poverty is also a 'legacy' issue," he said.

Painting a gloomy picture of the banking sector, the Reserve Bank of India (RBI) has said Gross NPA ratio of banks is likely to rise from 11.6 percent in March 2018 to 12.2 percent before the finish of the current fiscal.

In its Financial Stability Report (FSR), the RBI has said worry in the banking sector continues as gross non-performing advances (GNPA) proportion rises further.

"Large scale pressure tests demonstrate that under the gauge situation of current macroeconomic viewpoint, SCBs' (planned business banks) GNPA proportion may ascend from 11.6 for every penny in March 2018 to 12.2 for each penny by March 2019," it said.

Referring to the 11 state-owned banks under prompt corrective action framework (PCA), the RBI said they may encounter declining of their GNPA proportion from 21 percent in March 2018 to 22.3 percent by this fiscal-end.