RBI chief faces tough questions from House panel over bank frauds

New Delhi, June 12: The Reserve Bank needs more powers to oversee public sector banks ( PSBs), governor Urjit Patel told a parliamentary panel on Tuesday amid mounting bad loans in state- run lenders.

The RBI governor, who appeared before the Parliamentary Standing Committee of Finance, faced tough questions from legislators on bad loans, bank frauds, cash crunch and other issues, according to sources.

Sources said the governor assured the members that steps were being taken to strengthen the system.

Regarding PSBs, he told the panel that the RBI has “inadequate” control over them.

The governor asked for more powers to control the government- owned banks, said sources present at the meeting.

There are 21 stateowned banks, including State Bank of India.

Their combined losses crossed a whopping ` 87,300 crore in 2017- 18 fiscal, topped by scamtainted Punjab National Bank which took a hit of nearly ` 12,283 crore.

Of the 21 state- owned banks, only two banks, Indian Bank and Vijaya Bank, posted profits during 2017- 18. Indian Bank posted the highest profit of ` 1,258.99 crore and Vijaya Bank’s profit was ` 727.02 crore in the fiscal. Gross non- performing assets of the entire banking sector stood at ` 8.31 lakh crore at endDecember 2017.

Sources added the RBI governor also answered queries regarding the $ 2 billion fraud allegedly committed by diamontaire Nirav Modi and his associates in the PNB.