PM Narendra Modi speaking at the launch of India Post Payments Bank (IPPB) in Delhi. Photo: ANI
Prime Minister Narendra Modi on Saturday blamed 'phone-a-loan' scam of the previous UPA government for the bad loans in the banking sector and said every penny given at the behest of 'namdars' (dynasts) will be recovered.
Speaking at a function to launch the payments bank of the postal department, he said a majority of bank funds during the previous regime were reserved only for rich who were close to a particular family.
Against Rs 18 trillion loans given since Independence to 2008, the figure rose to an astronomical Rs 52 trillion in six years thereafter, he said.
"Loans were given on phone calls made by 'namdars' (dynasts)," he said without taking anyone's name.
Banks lent 'crores' of rupees in contravention of rules to businessmen who were referred by the 'namdars', he alleged.
"Knowing fully well that loans will not be paid back, banks lent money on orders of a family to a few," he said adding the lenders were forced to restructure the debt when the borrowers defaulted.
He charged the previous UPA government of hiding the extent of NPAs.
Since coming to power in 2014, the NDA government has analysed the enormity of the situation and asked banks to strictly recover dues, he said.
"Congress had put the economy on a landmine," he said. "Our government brought out the true picture of NPAs and the scam of the previous government."
During the last four years, all loans in excess of Rs 500 million have been reviewed and ensured that terms are strictly complied with, he said.
Modi said 12 of the biggest loan defaulters have an outstanding of Rs 1.75 trillion. Another 27 have Rs 1 trillion. "We never gave any loans to any of the 12 big defaulters," he said.