RBI Governor Urjit Patel, Summoned By Parliamentary Panel On May 17 To Explain Bank Scams

File Picture Courtesy : The Financial Express

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, according to various media reports.

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 USD 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.