Concerned over rising NPAs of banks, a Parliamentary panel asked the government to take urgent remedial measures to reduce the volume of stressed assets in the system and strengthen its vigilance mechanism.
The Committee on Petition in its reports said that it is constrained to note that even after having a ‘vigilance mechanism’ in vogue in the banking system, there are incidences of fraud relating to non-performing assets.
‘Not yielding result’
“In this regard, the Committee opined that merely issuing of guidelines or advisories by the government or the RBI for averting the incidences of fraud relating to NPAs do not seem to have yielded the desired results and the RBI — being a Regulator — does not seem to have succeeded insofar as implementation and enforcement of its own guidelines is concerned,” it said. The Committee, therefore, recommended that the government impresses upon the Reserve Bank of India to monitor and follow up strict compliance of relevant instructions with banks and financial institutions on a regular basis, the panel added.
It also recommended that the existing vigilance mechanism be revisited and, if required, be amended, to provide more teeth to it.
