A parliamentary panel has called Reserve Bank Governor Urjit Patel on May 17 to answer queries on a spate of banking scams unearthed in the last few months and mounting bad loans in the system, sources said today.
A parliamentary panel has called Reserve Bank Governor Urjit Patel on May 17 to answer queries on a spate of banking scams unearthed in the last few months and mounting bad loans in the system, sources said today.
The Standing Committee on Finance, headed by senior Congress leader M Veerappa Moily, at its meeting here raised several queries related to the banking sector with Financial Services Secretary Rajiv Kumar.
The panel met against the backdrop of about $2 billion fraud in the country's second largest state-run bank PNB. The fraud was allegedly perpetrated by billionaire jewellery designer Nirav Modi and his uncle Mehul Choksi.
Several other frauds have also come to light in the past couple of months. Certain private lenders, including ICICI Bank and Axis Bank, were too in the news for wrong reasons.
Sources said some of the members, including BJP MP Nishikant Dubey, wondered if the RBI has failed as regulator to check bad loans despite having instruments like corporate debt restructuring.
"The committee has invited the RBI Governor on May 17. The members will be asking him about the scams and other banking regulations," a source said.
Former Prime Minister Manmohan Singh, who is member of the committee, also attended the meeting.
The RBI governor had recently said that the central bank did not have adequate powers to deal with pubic sector banks.
"The panel would like to know what kind of powers the RBI governor needs," another source said, adding that regulation is an important part and that is why the governor has been called.
The panel, sources said, discussed a spate of banking scams, both in public and private sector banks.
When asked if PNB and ICICI Bank issues figured during the meeting, the source said issues related with "all commercial banks, including ICICI Bank" were discussed.
The finance ministry officials gave part replies to queries of the lawmakers and they have been given three weeks time to file a complete report on their questions.
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