Sitharaman informed the House that 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, and an aggregate amount of Rs 33,801 crore has been recovered
The Enforcement Directorate (ED) has confiscated assets worth Rs 15,186.64 crore under the stringent prevention of money laundering law and almost all of these have been restituted to public sector banks, Finance Minister Nirmala Sitharaman informed the Rajya Sabha on Tuesday.
Replying to supplementary questions in the Rajya Sabha, the minister said specific actions through various legal provisions are being taken against defaulters and as a result, "huge monies" are going back to the banks.
Sitharaman informed the House that 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, and an aggregate amount of Rs 33,801 crore has been recovered.
"As of December 1, 2023, assets amounting to Rs 15,186.64 crores under the PMLA have been confiscated by the ED out of which Rs 15,183.77 crores have been restituted to the Public Sector Banks," she said.
Chairman Jagdeep Dhankhar asked the minister to explain the meaning "phone banking" which was mentioned in reply to a supplementary question.
Explaining the meaning of the phrase, Sitharaman said 'Phone Banking' was the method through which "political interference (during UPA rule of 2004-2014) spoilt all our banks and drove them to a loss-making situation".
"'Phone Banking' was at that time when people would call the banks and say 'so and so will come to seek a loan from your bank, please grant it', meaning that there's no need to look at their eligibility, etc & that the loan must be granted," the minister said.
She further said that the heart of the problem was during the 10 years of UPA rule between 2004 and 2014 when calls were made to grant loans to people who were not worthy of getting a loan.
"The burden fell on us to sort the Indian banks out with reforms. Prime Minister Narendra Modi sat with all of us, including my predecessor Arun Jaitley (former finance minister). We spent a lot of time understanding where the problem was and worked together with the RBI," Sitharaman said.
It must be looked at what contributed to the NPAs and made Indian banks actually have a twin balance-sheet problem which brought down the Indian economy to the 'Fragile Five', she added.
Due to the measures taken by the Modi government, the minister said the Indian economy is the world's fastest-growing economy, registering a 7.6 per cent GDP growth rate in the last quarter.
Sitharaman also informed the House the Punjab and Maharashtra Cooperative Bank (now merged with Unity Small Finance Bank) has recovered Rs 104.02 crore with active cooperation and support from agencies.
Assets amounting to Rs 692.89 crores have been confiscated under the provisions of the Fugitive Economic Offenders Act, 2018, she said.
The finance ministry also informed the House that over the last two financial years, the number of non-performing asset (NAP) accounts in the commercial banks has declined from 2.19 crore to 2.06 crore, showing a decrease of 6.2 per cent.
Similarly, aggregate outstanding of such accounts (gross NPAs) has declined from Rs 7.41 lakh crore to 5.72 lakh crore during the same period, showing a decline of 22.9 per cent.
Further, slippage ratio (fresh slippages of NPAs during the financial year as percentage of standard loans and advances at the beginning of the financial year) of banks has declined from 2.74 per cent (fresh slippages of Rs 2.86 lakh crore) in the financial year 2021-22 to 1.78 per cent (fresh slippages of Rs 2.13 lakh crore) in the financial year 2022-23.
Net NPA ratio, Sitharaman said, has come down to 0.95 per cent in 2022-23 for all commercial banks from 5.94 per cent in 2017-18.
In the case of state-owned banks, the net NPA has declined to 1.24 per cent from 5.94 per cent in 2017-18.