The Bombay High Court has asked the Reserve Bank of India to respond to a petition which seeks CBI probe into fraudulent grant of loans and consequent rise in nationalised banks' non-performing assets.
The division bench of Justices Abhay Oka and GS Kulkarni last week directed RBI to file a reply and posted the matter for hearing on December 9. The PIL, filed by activist Ketan Tirodkar, says the NPAs of nationalised banks jumped from Rs 455 crore in March 2008 to Rs 9,190 crore in March 2012 as per the data obtained under the Right to Information Act.
Tirodkar further says that several banks had reported to CBI at least 140 cases of fraud in loans between 2008 to 2012. However there is no information as to whether cases were registered.
The nationalised banks have not complied with the Banking Regulation Act which requires that periodically annual reports be submitted to the apex bank. Had the reports been submitted the fraud would have come to light, the PIL says.
This was done to shield the beneficiaries of such bad loans who are in league with bank officials, it alleges.
The bank authorities sanctioned loans in many cases by manipulating the feasibility reports and did not report accumulating NPAs to RBI, it says.
"When such defaults in repayment of loans are brought to the notice of the apex bank, it is not possible at that stage to issue corrections and the banks are forced to write off the loans or settle them for peanuts," the PIL says, seeking a direction to CBI to register criminal cases.
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