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Updated: August 21, 2013 23:41 IST

Corporate majors contribute to bulk of NPAs of banks: CBI chief

Devesh K. Pandey
Comment (3)   ·   print   ·   T  T  
Ranjit Sinha
Ranjit Sinha

CBI has already initiated enquiries against some of the big defaulter accounts

A bulk of the public sector bank non-performing assets (NPAs), which is under the Central Bureau of Investigation scrutiny for suspected wilful misappropriation of public money running into thousands of crores, is on account of debt repayment defaults by 30 corporate majors, said CBI Director Ranjit Sinha here on Wednesday.

The CBI, which is learnt to have come across irregularities in certain cases, is soon expected to register a preliminary enquiry for further probe.

As first reported in the The Hindu last week, the CBI chief confirmed that an enquiry was initiated against some top business houses. “A bulk of the NPAs is from the top 30 accounts, which is learnt to be running into thousands of crores. The CBI has already initiated enquiries against some of the big defaulter accounts and it is here that I seek cooperation from the Chief Vigilance Officers of banks concerned to play a proactive role in checking the losses to the exchequer and public money,” said Mr. Sinha at the fifth annual conference of CVOs of Public Sector Banks and Financial Institutions and Officers.

Mr. Sinha said that according to government estimates, the gross NPAs rose substantially from Rs.59,924 crore in 2010 to Rs.1,17,262 crore in 2012.

“At times, there appears to be reluctance on the part of banks to declare bad accounts as frauds despite there being clear-cut manifestations. There is need to realise that the delay in reporting of a fraud will adversely affect the tracking and recovery of proceeds of crime. Another issue is the fixing of accountability of staff and there are often differences of opinion between the CBI and banks regarding the role of public servants,” he said adding that there should be no reason for denial of sanction for prosecution wherever mala fide acts by delinquent officials caused huge losses to the bank.

Escape route of defaulters

Top CBI officials said the agency’s banking probe unit has also scrutinised cases of loan restructuring, a common route taken by the defaulters to escape immediate loan repayments. As the probe advances, the investigating agency would also probe the suspected complicity of bank officials in question.

Sometime ago, Reserve Bank of India Deputy Governor K.C. Chakrabarty had in a full paper on corporate debt restructuring quoted statistics, revealing that the restructured advances ratio to gross advances had gone up from 4.87 per cent in March 2009 (a year after financial crisis peaked) to 8.24 per cent in March 2012. By the 2012-13 financial year-end, it shot up to 10 per cent.

Today, the estimated gross outstanding advances are pegged at Rs.50 lakh crore, putting the restructured debt figure at roughly Rs.5 lakh crore compared to Rs.2 lakh crore as recorded four years ago.

According to an RBI analysis, CBI officials said, the number of fraud cases had shown a decreasing trend from 24,791 cases in 2009-10 to 13,293 cases in 2012-13.

Emphasising the importance of in-house vigilance, C. Rangarajan, Chairman Economic Advisory Council to the Prime Minister said both preventive vigilance and punitive vigilance were very important factors in maintaining discipline in the banking and financial sector. Those who violated procedures and rules must be appropriately punished.

Now it will be the turn of the banking system to follow the precedent set up by the UPA
government, and will 'make the relevant files disappear ' or destroy them in 'short circuit' tio
destroy the evidence of fraudulent loans sanctioned to these business houses with political
connections. And Chidambaram will enact the same drama as FM that the matter is being
investigated and the guilty will be punished to hide the crime of the business houses. In the
mean time the term of the present government would have been over. Same screen play, but
actors to cheat the people will be different.

from:  MvjRao
Posted on: Aug 22, 2013 at 03:22 IST

Non-perfoming assets have grown from almost sixty thousand to almost
1,20,000,i.e., almost double in two yeasrs !It is a staggering
amount.Another feature is that these borrowers are all big borrowers--
--not borrowers for buying a car or or a house obviously.Then why the
Banks,the Nationalised Banks at that,should feel shy to take drastic
action.Does it not amount to criminal offence?Not only that they have
failed to realise such huge loans, but also that the Bank
Administration is creating hurdles in the way of the CBI which wants
to investigate,as this report tells us.I feel that the Supreme court
should be approached to intervene. I do not see any other way
out.Besides,these figures mentioned here relate to only two years and
the total NPA,a sweet name for brazen fraud, will be several times
bigger.

from:  v janardanrao
Posted on: Aug 21, 2013 at 23:46 IST

Majority of these defaulters do have Big political connections and they will get away by making CBI doing a Steno's work and file it in the safe until files their disappearing time.
The Banks take the hit so that is transferred to the normal taxpayer which includes the CBI (Caged)

from:  RK
Posted on: Aug 21, 2013 at 18:15 IST
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