New Delhi:
Finance Minister Nirmala Sitharaman on Monday defended the five years it took to file the first fraud complaint in the Rs 22,842 default by Gujarat-based ABG Shipyard, saying the time it took to detect the fraud was less than usual used to be.
She said the loans were made under the Congress-led UPA regime and the account became a non-performing asset (NPA) in November 2013 and the debt was restructured by all lenders in March 2014, but it could not. be withdrawn.
The opposition congress has accused those in the highest echelons of power in the Narendra Modi government of complicity, conspiracy and complicity in what it described as “India’s biggest bank fraud” – Rs 22,842 crore is bigger than the Rs 14,000 crore PNB scam by Nirav Modi and his uncle Mehul Choksi.
Ms Sitharaman argues that a bank follows a certain process to report account fraud, and said it takes banks almost 52-54 months to do intensive work before a decision is made.
“In this particular case (ABG Shipyard)… I should tell the banks that they need less than what is normally an average time to detect this type of fraud… Normally, I said 56 months and too late it takes much less time to track such things down,” she said after the usual budget post to RBI board members here.
State Bank of India (SBI) had stated in a statement on Sunday that the loans granted to ABG Shipyard had become NPA on November 30, 2013, but after a failed debt restructuring, it was “classified as NPA with retroactive effect from 30 July 2016.” -11-2013.” Congress has questioned why it took the government five years after ABG Shipyard’s liquidation proceedings to file an FIR in connection with the alleged fraud involving 28 banks.
According to SBI, the first complaint was filed with CBI in November 2019 and “a new and expanded second complaint was filed in December 2020.” E&Y was appointed by lenders as a forensic auditor in April 2018 and they submitted their report in January 2019. E&Y report was submitted to the Fraud Identification Committee of 18 lenders in 2019. Fraud is mainly attributed to misappropriation of funds, embezzlement and criminal breach of trust.
“I’m in the RBI building, so I don’t want to talk too much about politics, but I’m sorry about the kind of noise that comes the biggest ‘ghotala’ in Prime Minister Narendra Modi’s time. Not at all. This was a loan that was given well before 2013 and had even become an NPA by 2013. So people are digging holes into which they fall themselves,” said the finance minister.
“They made the noise, not realizing it was all then (UPA regime) and we took less time to detect it, take action… So action is taken here like any other major bank failure,” he said. madam said Sitharaman.
Talking about the health of the banking sector, the finance minister said it has improved and all public sector banks have done well.