New Delhi, June 12: The Reserve Bank of India (RBI) needs more powers to oversee public sector banks (PSBs), Governor Urjit Patel told a parliamentary panel on Tuesday.
Patel, who appeared before the Parliamentary Panel of finance earlier in the day, faced tough questions from lawmakers on bad loans, bank frauds, cash crunch and other issues, Firstpost‘s PTI story reported citing sources.
During the questioning, the governor assured the members that measures were being taken to strengthen the system.
Regarding PSBs, he told the panel that the central bank has “inadequate” control over them.
The governor asked for more powers to control the government-owned banks, said sources present at the meeting.
At present, there are 21 state-owned banks, including State Bank of India.
Their combined losses crossed a whopping Rs 87,300 crore in 2017-18 financial year, topped by Punjab National Bank which took a hit of nearly Rs 12,283 crore.
Among 21 state-owned banks, only two banks, Indian Bank and Vijaya Bank, posted profits during 2017-18.
While the gross non-performing assets (NPA) of the whole banking sector stood at Rs 8.31 lakh crore at end-December 2017.
Some members of the panel, headed by senior Congress leader Veerappa Moily, sought to know about the reasons for recent instances of the cash crunch in the ATMs and why enough steps were not taken to tackle banking frauds.
On the related note, Patel told the committee that steps were being taken to strengthen the banking system. “We are confident that we will be able to tide over the crisis,” a source quoted the governor as saying with respect to the NPA situation.
Patel was summoned to appear before the former union minister Veerappa Moily-led panel to discuss various issues pertaining to the Indian economy.