UPA’s phone-a-loan scam led to NPA burden: PM Modi

NEW DELHI: Prime Minister Narendra Modi on Saturday attacked Congress for leaving the economy on a “landmine” because of indiscriminate lending. Loans were handed out to select businessmen after phone calls were made by “namdars” (dynasts), he said. Modi blamed “phone-a-loan” scam of the previous government, where money was lent by banks to select rich businessmen close to a particular family, for mounting non-performing assets (NPA) or bad loans.

None of the 12 biggest defaulters, who between them account for over Rs 1.75 lakh crore of NPAs, were given loan by the present government, Modi said at the launch of the payments bank of the Indian postal department.

The prime minister said the country was cheated when the last government claimed such loan amount as Rs 2-2.5 lakh crore though it was Rs 9 lakh crore. This comes days after Congress President Rahul Gandhi’s attack on the government for NPAs jumping to Rs 12.5 lakh crore under BJP rule from Rs 2.5 lakh crore under the UPA government.


Modi said when his government came to power in 2014, it noticed that public-sector banks had been plundered. Loans of banks jumped to `52 lakh crore from 2008-14 from Rs 18 lakh crore in the previous six decades.

“In 2014, after our government was formed we realised that the Congress and namdaars had put India’s economy on a landmine,” he said. Modi said his government has “defused” the landmine and the result was the 8.2% GDP growth clocked in the first quarter of the financial year. “This is proof of the fact that the country is moving in the right direction.”

Payments Bank
India Post Payments Bank aims to take banking to the doorstep of every citizen by arming three lakh postmen and Grameen Dak Sewaks with digital aids to deliver financial services. It will have 650 branches and 3,250 access points, which will be scaled up to 1.55 lakh post offices by December 2018. The bank will accept deposits of up to Rs 1 lakh, offer remittance services, mobile payments/transfers/purchases and other banking services like ATM/debit cards, net banking and third-party fund transfers. However, it can’t offer loans directly, or issue credit cards.