Indiscriminate lending by Congress the biggest scam, says Piyush Goyal

The Congress government and banks used to hide NPAs under the name of stressed assets, the rail minister added

The BJP government fired a fresh salvo at the Congress terming "indiscriminate lending" during the latter party's ruling period as the biggest scam that the country has seen.

Railway minister Piyush Goyal said on Tursday that the UPA government had "pressurised banks" to almost triple the total lending from Rs 18.16 lakh crore in 2008 to Rs 52.15 lakh crore by March 2014. "Though the issue of non-performing assets (NPA) came to the limelight recently, the BJP government got it in legacy. The Congress government and banks used to hide NPAs under the name of stressed assets," Goyal said addressing the media in Delhi on Thursday.

He added that even though NPAs out of the total lending was in the range of 4.7 per cent during the Congress, another 7.2 per cent was kept as stressed assets taking the total bad loans to around 12 per cent. "We are now forcing borrowers to repay those loans and have brought the NPAs to the tune of nearly 2 per cent now," he said. 

This comes at a time when the bankers are set to refer a second set of companies to the National Company Law Tribunal (NCLT,) for resolution under the Insolvency and Bankruptcy Code (IBC), out of the fresh list of 28 defaulters that the Reserve Bank of India has vome out with. The first set of 12 cases of large defaulters with borrowings amounting to about Rs 1.75 lakh crore is already under NCLT for quick resolution.

"Finally, we have a government which is tightening the noose on large defaulters. After the asset quality review (AQR) that this government has done, corporates are being forced to pay back loans. Those who criticise this government should understand this is not write off of loans but provisioning," he added. 

After the Asset Quality Mechanism was put in place by the RBI in August 2015, 82 per cent of the stressed assets were identified as NPAs as against 36 per cent in March 2014. 

The minister also added that in the last three years, the government has taken major steps to revive the banking sector, which include IBC, Benami Transaction Prohibition Amended Act of 2016, Mission Indradhanush for revamping public sector banks and Rs 2.11 lakh crore recapitalisation plan of PSU banks.