Need power to deal with PSBs: RBI guv

New Delhi, June 12: The RBI needs more powers to oversee public sector banks, 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 panel, faced tough questions from lawmakers 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 governmentowned banks, said sources present at the meeting.

There are 21 state- run banks, including SBI. Their combined losses crossed a whopping ` 87,300 crore in FY18, topped by PNB which took a hit of ` 12,283 crore.

Of the 21 state- owned banks, only two banks, Indian Bank and Vijaya Bank, posted profits during FY18.

Gross non performing assets of the entire banking sector stood at ` 8.31 lakh crore at endDecember 2017.

Sources further said the RBI governor also answered queries regarding the $ 2 billion fraud allegedly committed by billionaire Nirav Modi and his associates in the Punjab National Bank.

According to sources, Patel said it was impossible to look after each and every branch of a bank in terms of an audit.