India staring at banking crisis, remedial steps needed: Congress

MUMBAI: Castigating the BJP government at the Centre, Congress today said the country may be headed for a " banking crisis" if remedial measures are not taken.

Former Maharashtra chief minister Prithviraj Chavan, who was also MoS in the PMO, said the mounting NPAs was an indication to this effect.

"The total NPAs from corporate sector is Rs 4.2 lakh crore and majority of these are from steel, energy and mining and infrastructure sector. Unless these loans are written off, there is no way ahead," he said.

While debt of SMEs is Rs 65,000 crore, farm loans are over Rs 1 lakh crore, he said.

When asked if the country was headed for a financial crisis, he said, "I would not say it is a financial crisis, but more of a banking crisis and it is a potential danger for Indian economy."

"If the government wants to write off loans, it should first do the SME and farm loan," he said, adding that what is needed today is more job creation.

Chavan said there was a lot of resentment among farmers and the rural folk against the BJP governments at the Centre and the state.

He also accused the government of trying to disturb social harmony.

Replying to a question on Shiv Sena's criticism of the BJP government, Chavan said Uddhav Thackeray is trying to highlight people's anger against the government.