Year Round Up: Banks Chase Borrowers In 2014 To Recover Loans
The government suspended Jain after the Finance Ministry received a preliminary report from the CBI on the arrest.
Soon, a fixed deposit scam involving Rs 436 crore came to the fore and the government initiated a forensic audit at Oriental Bank of Commerce and Dena Bank, wherein the lenders had allegedly misappropriated funds from their customers.
The lenders are alleged to have indulged in siphoning off the money (Rs 180 crore by OBC and Rs 256 crore by Dena Bank) received as fixed deposits. Few officials of both the banks were suspended after forensic audit report.
These irregularities prompted the government to look into the entire selection process for top executives. Government scrapped the selection of six PSU bank heads during UPA tenure following a high-level panel finding irregularities in the process followed.
Besides, selection of 14 executive directors (EDs) for various were also cancelled.
On the business front, non-performing assets (NPAs) continued to soar, thus impacting the profitability of banks.
Of Rs 2.40 lakh crore gross NPAs reported by Indian banking system as on March 31, 2014, a whopping Rs 2.16 lakh crore came from the public sector banks.
As of September 30, gross NPAs or bad loans of public sector banks moved higher to Rs 2.41 lakh crore, while the same for private sector banks stood at 26,571 crore.
With the rising NPAs, banks pulled up their socks as far recovery was concerned. They used all the means to recover dues from borrowers.
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