Union Finance Minister Nirmala Sitharaman. File
| Photo Credit: GIRI KVS
Finance Minister Nirmala Sitharaman on May 31 stated the Modi Government has turned around the banking sector by means of varied reforms and improved governance which has led to banks recovering greater than ₹10 lakh crore from dangerous loans between 2014 and 2023.
She stated the Enforcement Directorate has investigated around 1,105 financial institution fraud instances, which resulted within the attachment of ₹64,920 crore value of proceeds of crime. As of December 2023, property amounting to ₹15,183 crore have been restituted to the Public Sector Banks (PSBs).
“Recently, India’s banking sector achieved a significant milestone by recording its highest-ever net profit, crossing ₹3 lakh crore. The banking sector turned around due to PM Shri @narendramodi’s strong and decisive leadership. Our government atoned for the UPA’s sins in the banking sector through comprehensive and long-term reforms,” Ms. Sitharaman stated in a publish on X. She stated there was no leniency in recovering dangerous loans, particularly from massive defaulters, and the method is ongoing.
She stated, “This is in stark contrast to the situation before 2014 when the Congress-led UPA government turned the banking sector into a cesspool of bad loans, vested interests, corruption and mismanagement.”
“It’s a pity that Opposition leaders are still unable to distinguish between write-offs and waivers. After the ‘write-offs’ as per RBI’s guidelines, banks actively pursue the recovery of bad loans. And, there has been no ‘waiver ‘ of loans for any industrialist. Between 2014 and 2023, banks recovered more than ₹10 lakh crore from bad loans,” she stated.
“Under the UPA, obtaining loans from banks often depended on powerful connections rather than a solid business proposition. Banks were forced to neglect proper due diligence and risk assessment before sanctioning these loans,” she stated.
Reforming the banking sector
Ms. Sitharaman stated the Modi government carried out a complete 4R technique of Recognising NPAs transparently, Resolution and Recovery, Recapitalising PSBs, and Reforms after coming to energy in 2014. “Our reforms addressed credit discipline, recognition and resolution of stress, responsible lending and improved governance. We replaced political interference in banks with professional integrity and independence,” she stated.
The minister stated the Modi government will proceed to take decisive measures to strengthen and stabilise our banking system, making certain banks assist India’s development path to Viksit Bharat by 2047.
Efforts to increase banking in India faltered for many years resulting from Congress’s restricted actions past financial institution nationalisation, which benefitted primarily the educated and elite. Before 2014, banking entry was largely restricted to cities, she stated. “We remain committed to further driving financial inclusion and empowering the underprivileged,” Sitharaman stated.
