Finance Minister Nirmala Sitharaman declared on Friday that the Modi government has successfully transformed India's banking sector through extensive reforms and improved governance, resulting in the recovery of more than Rs 10 lakh crore from bad loans between 2014 and 2023. She highlighted that the Enforcement Directorate's investigations into 1,105 bank fraud cases led to the attachment of Rs 64,920 crore worth of proceeds of crime. Additionally, assets amounting to Rs 15,183 crore have been restored to Public Sector Banks (PSBs) as of December 2023.
"Recently, India's banking sector achieved its highest-ever net profit, exceeding Rs 3 lakh crore. This remarkable turnaround is a result of PM Shri @narendramodi's strong and decisive leadership. Our government has rectified the UPA's mistakes in the banking sector through comprehensive and long-term reforms," Sitharaman stated in a social media post.
She emphasized that there has been no leniency in recovering bad loans, particularly from large defaulters, under the Modi government, and this process continues actively. Sitharaman criticized the previous UPA government, accusing it of turning the banking sector into a hub of bad loans, vested interests, corruption, and mismanagement before 2014.
"It's regrettable that opposition leaders still fail to differentiate between write-offs and waivers. Following 'write-offs' as per RBI guidelines, banks actively pursue the recovery of bad loans. There has been no 'waiver' of loans for any industrialist. Between 2014 and 2023, banks recovered more than Rs 10 lakh crore from bad loans," she explained.
The Finance Minister slammed the UPA's tenure for mismanaging the sector, attributing the Non-Performing Asset (NPA) crisis to the 'Phone Banking' practices where loans were granted to undeserving businesses under pressure from UPA leaders and party functionaries.
"After coming to power in 2014, the Modi government implemented a comprehensive 4R's strategy: Recognising NPAs transparently, Resolution and Recovery, Recapitalising PSBs, and Reforms. Our reforms addressed credit discipline, stress recognition and resolution, responsible lending, and enhanced governance. We replaced political interference in banks with professional integrity and independence," Sitharaman affirmed.
She pledged that the Modi government will continue taking decisive steps to strengthen and stabilize the banking system, ensuring banks support India's growth path to Viksit Bharat by 2047.
"In contrast to the UPA Alliance, dominated by dynastic parties that used banks for their 'Parivar Kalyan' (family welfare), our government has utilized banks for 'Jan Kalyan' (public welfare)," she added.
Sitharaman also acknowledged that efforts to expand banking in India faltered for decades due to limited actions beyond bank nationalisation by the Congress, which primarily benefited the educated and elite.
"We are committed to further promoting financial inclusion and empowering the underprivileged," Sitharaman concluded.
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