Modi government dealt a deadly blow to the banking sector through demonetisation: Randeep Singh Surjewala
Congress leader Randeep Singh Surjewala on Wednesday accused the government of destroying the financial institutes as well as public sector banks. Issuing a press release, Mr Surjewala touched upon a number of issues relating to the country's economy, accusing the government of failure.
"In March 2013-14, NPAs were Rs 2,16,739 crores (3.8 per cent of total loans). NPAs increased to Rs 9,35,000 crores as in September 2019 (to 9.1. per cent)," he said while slamming the government.
"RBl's July 2020 ''Financial Stability Report'' reflects that Bad Loans in the Banking System can reach a whopping 14.7 per cent, a 20-year high. How did it balloon so much?," the Congress leader asked.
Hitting out at the government further, he said, "With the banks not allowed to recover loans from defaulters, all further lending came to a halt. Bank credit growth was 14 per cent when the Modi government assumed power in the year 2014. Bank Credit Growth is now down to 4% and will become zero soon, as per RBl's own report. This means there is no money available for businesses that need them because banks are hesitant to lend."
"That is precisely why of the Rs 3,00,000 crores guaranteed loans to MSME's announced with much fanfare, only Rs 1,23,000 crores were sanctioned and an even lower amount of Rs.68,311crores has been disbursed. The story repeats everywhere," he said.
Speaking about the revelations by former RBI Governor Urjit Patel, Mr Surjewala added, "The damning evidence of the Modi government's dishonest intentions is now coming to light. Fresh revelations by former RBI Governor Urjit Patel have shown how the Government diluted the lnsolvency and Bankruptcy Code, hurting the Central Bank's efforts to recover bad loans. This benevolence towards crony capitalists has been unfolding since Dr Raghuram Rajan''s first warning to the PM that fell on deaf ears."
"Modi government dealt a deadly blow to the banking sector through demonetisation and its impact continues to haunt the economy even after three-plus years of that fateful evening of November 8, 2016. It achieved nothing. Currency in circulation has now reached an all-time high of 14 per cent of GDP," he added.
Referring to the Rs 20-lakh-crore package announced by the government, the Congress leader pointed out, "The Modi government''s response during COVID was the hogwash of Rs 20 Lakh Crore Package which ended up as an empty formality. Non-food credit growth is almost zero and Bank credit Growth is reducing from 4% to the baseline ''O''. Banks are just redepositing the money back with the RBI."