New Delhi:The RBI 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 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 the 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 state-owned banks, including SBI.
Sources further said the RBI Governor also answered queries regarding the $2 billion fraud allegedly committed by diamontaire Nirav Modi and his associates in the PNB. According to sources, Patel said it was impossible to look after each and every branch of a bank in terms of an audit.
Some members of the committee, headed by senior Congress leader Veerappa Moily, sought to know about the reasons for recent instances of ATMs running out of cash and why enough steps were not taken to tackle banking frauds.
Patel told the panel that steps were being taken to strengthen the banking system. “We are confident that we will be able to tide over the crisis,” a source quoted the Governor as saying with respect to the NPA situation.