Insisting that Vijay Mallya was not given even “a rupee benefit” under the Modi government, Finance Minister Arun Jaitley today said loans were reportedly given to the businessman during the previous UPA rule through the intervention of the North Block, a reference to the Finance Ministry.
Replying to a debate on Budget in Lok Sabha, he blamed the previous UPA dispensation for the massive NPAs of the banks, saying lending of “indiscriminate” loans to select people and industries during that period was the root cause of the problem.
In an obvious reference to Rahul Gandhi’s allegations that the current government had given a benefit of Rs 1,200 crore to Vijay Mallya, Jaitley insisted that not “a rupee benefit” was given to the businessman by any bank since the NDA came to power on May 26, 2014.
As per the official figure, gross NPAs of public sector banks rose to Rs 6,30,323 crore by September 2016. “The percentage (of NPAs) has not been increased because we have started giving much higher unaccountable loans. Most of these are loans given during the 2007-08-09 period when the boom period of the economy was there,” he said.
“Your allegation is that your sins have not been corrected and reversed by us. This cannot be a charge on us,” said the Finance Minister. Jaitley said disproportionate loans were given by the UPA to certain industries and that they were not farmers.
Documents which have come out say that loans were given through intervention of the North Block and the concerned bank officials were having to pay for it now, he said, in an apparent reference to cases being filed against some bank officials in connection with Mallya case.
“These were not to small people, it was to big companies, it was your legacy, it was your contribution. Our misfortune is that every year the interest goes up and so it becomes 5.1 per cent from 4.1 per cent and then becomes 6.1,” he said, adding the NDA was paying “interest” on UPA’s work. Jaitley further said the problem was not with NDA’s management of the banks but with “over management” of the banks by the previous government.
Participating in the debate yesterday, Congress member Veerappa Moily had attacked NDA over the growing NPAs of the banks. During Jaitley’s reply, Moily said loan growth has become “three-decadal low” and that it had not happened in the history of the country.
Jaitley, acknowledging that there was the decline in loan growth, said NPAs grew due to “indiscriminate loans” given by the UPA. Some of these NPAs were being hidden under the carpet, he said.
Without mentioning Rahul Gandhi’s name, he further said “your leader, infinite number of times, said we gave some Rs 1,200 crore advantage to one person who fled to London.
“I heard this at least a dozen times, not a rupee advantage by any bank since 26 May 2014 has been given to that person by any bank. This falsehood has been repeated indefinitely. “But now the documents which have come out, say this was happening not by the banks but this was happening through the intervention of the North Block and the bank’s officials are having to pay for it now,” he said.
The Finance Minister further said, “the problem of NPAs was partly the slowdown (of loan growth). But it is substantially due to the over management of the banking system you did and the indiscriminate loans that were given during that period to a select few and to those major industries.
“Unfortunately now you have shifted allegation and said we did all this what have you done to manage it and correct it,” he said.