Loans To ABG Shipyard Turned NPAs Before 2014, Says Nirmala Sitharaman

The minister at the news meet said that the banks took lesser than normal time to detect the fraud perpetrated by the shipping firm

Union Finance Minister Nirmala Sitharaman and Reserve Bank of India Governor Shaktikanta Das during the post-budget meeting of the RBI central board, in New Delhi on Monday. Photo: PTI

New Delhi: Finance Minister Nirmala Sitharaman on Monday said the ABG Shipyard account turned non-performing asset (NPA) during the UPA regime.

The minister at the news meet said that the banks took lesser than normal time to detect the fraud perpetrated by the shipping firm. She was addressing the board members of the Reserve Bank of India (RBI).

According to PTI report, Sitharaman said, “...in this particular case with that kind of a measurement, actually, I should say to the credit to the banks, they’ve taken lesser than what is normally an average time to detect these kinds of frauds.”

The minister said normally banks take 52-56 months of time to detect such cases and initiate follow-up actions.

Recently, the Central Bureau of Investigation (CBI) booked ABG Shipyard, its former chairman and managing director Rishi Kamlesh Agarwal, and others for allegedly cheating a consortium of two dozen lenders, led by ICICI Bank.

The fraud at ABG Shipyard is much higher than the one perpetrated by Nirav Modi and his uncle Mehul Choksi, who cheated the Punjab National Bank (PNB) of around Rs 14,000 crore through issuance of fraudulent Letters of Undertaking (LoUs).

Nirmala Sitharaman also said that during the NDA regime, health of banks has improved and they are in position to raise funds from the market.

The RBI Governor Shaktikanta Das, who was also present at the press conference, said RBI’s inflation projections are quite robust. He said the momentum of inflation, from October 2021 onwards, is on a downward slope.

Das said, “It’s primarily the statistical reasons the base effect which is leading to higher inflation especially in third quarter, and the same base effect will play in different ways in the coming months.