In a further embarrassment to the SAD-BJP combine, the Reserve Bank of India (RBI) has asked the country’s top lender — State Bank of India (SBI) — to provide for losses on foodgrain-related loans issued to the Punjab Government.
Disclosing this, SBI chairman Arundhati Bhattacharya on Monday declined to comment on the quantum of SBI’s exposure to those loans.
Alleged discrepancy has been found in the foodgrain stockpiles in Food Corporation of India’s warehouses in Punjab purchased through bank loans from several State-owned banks.
At the same time, Minister of State for Finance Jayant Sinha has maintained that the Central Government is working with regulators, banks and other agencies to resolve the issue of missing foodgrain stocks in Punjab.
“We are working with the regulator, as well with the banks and various Government agencies to ensure that the matter with respect to food stocks is resolved satisfactorily,” said Sinha on the sidelines of a banking and finance conference in Mumbai.
He said that the issue, raised by the RBI, is correct from the standpoint of the regulator. “Banks’ explanation is also correct. We need to find a right solution for the issue,” Sinha added.
He did not specify the underlying value of the missing foodgrain or if the problem exists in other States as well. Sinha said that the Government will investigate the case and come out with the actual position in a few days.
As per the reports, foodgrain procured by the Punjab Government worth Rs 20,000 crore is missing from the State godowns. However, the Punjab Government denies the reports and has said that all stocks procured over the years have been duly accounted for.
Some 30-odd banks, led by SBI, had extended loans of Rs 12,000 crore to the State for its foodgrain procurement programme.
There are reports that lenders have threatened to stop lending to Punjab, a primarily agrarian State, in the new season if the issue remains unresolved. Out of Rs 1 trillion worth food credit, around 40 per cent (Rs 40,000 crore) are lent to Punjab alone, which means that the State procures 40 per cent of the overall food procurement on behalf of the FCI or the Centre.