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Key Points:
- ED confiscates Rs 15,186.64 crore under PMLA, almost all returned to PSBs.
- FM Sitharaman explains “Phone Banking” as political interference in UPA era.
- NPAs decline significantly under Modi government’s reforms.
- Indian economy now world’s fastest-growing, registering 7.6% GDP growth.
Highlights:
- The Enforcement Directorate (ED) has seized assets worth Rs 15,186.64 crore under the Prevention of Money Laundering Act (PMLA).
- Almost all of these confiscated assets, amounting to Rs 15,183.77 crore, have been returned to public sector banks (PSBs).
- Finance Minister Nirmala Sitharaman clarified that “Phone Banking” refers to political interference during the UPA’s 2004-2014 rule, where banks were pressured to grant loans based on political connections instead of merit.
- This resulted in a surge of non-performing assets (NPAs) and weakened the Indian banking system.
- The Modi government implemented various reforms to address the NPA issue, including stricter regulations, improved governance practices, and stricter loan recovery measures.
- These efforts have led to a significant decline in NPAs, with the number of NPA accounts decreasing by 6.2% and the aggregate outstanding of such accounts decreasing by 22.9% in the last two years.
- The slippage ratio of banks has also declined from 2.74% in 2021-22 to 1.78% in 2022-23.
- The net NPA ratio for all commercial banks has come down to 0.95% in 2022-23, compared to 5.94% in 2017-18.
- As a result of these positive developments, the Indian economy is now the world’s fastest-growing, registering a 7.6% GDP growth rate in the last quarter.
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