She came out strongly in her 13-tweet retort around 11 pm on Tuesday.
"Rahul Gandhi, MP (LS), and Randeep Singh Surjewala, spokesperson of Congress, have attempted to mislead people in a brazen manner. Typical to Congress, they resort to sensationalising facts by taking them out of context," the finance minister tweeted.
Rahul Gandhi has criticised the government saying it had hidden the list from parliament as it included friends of the ruling party.
The Congress leader tweeted on Tuesday afternoon around 3.20 PM, "I asked a simple question in parliament - tell me the names of 50 biggest bank scammers. Finance Minister refused to reply. Now RBI has put names of Nirav Modi, Mehul Choksi and other BJP friends in the list. This is why they hid the truth from parliament," Sitharaman countered that between 2009-10 and 2013-14, scheduled commercial banks had written off Rs 1,45,226 crore.
In response to the allegations, the finance minister said provisions are made for Non-Performing Assets according to a four-year provisioning cycle laid down by the RBI. "Upon full provisioning being done, banks write-off the fully provided NPA but continue to pursue recovery against the borrower. No loan is waived off," she clarified.
"Those defaulters, who do not repay despite having the capacity to pay, divert or siphon-off funds, or dispose of secured assets without bank's permission are categorised as wilful defaulters. They are those well-connected promoters who benefitted from UPA's 'Phone banking'," Sitharaman tweeted.
She also pointed at Raghuram Rajan, who was RBI Governor when the Congress was in power and said RBI could have raised more flags about the quality of lending back then.
Later she focused on the cases of Nirav Modi, Mehul Choksi and Vijay Mallya. She said that it was the Prime Minister Narendra Modi-led government which was pursuing these wilful defaulters.
She then stated the current position of those cases through the tweet.
"9,967 recovery suits, 3,515 FIRs, invoking Fugitive Amendment Act in cases are on now. Total value of attachment and seizures in the cases of Nirav Modi, Mehul Choksi and Vijay Mallya: Rs 18,332.7 crore," she said.
The finance minister also blamed Congress for failing to play a constructive role in cleaning up the system.