Expressing concern over overdues of public-sector banks, which rose sharply to Rs 54,178 crore in 9-months period ended December 2009, Sumitra Mahajan, BJP's Lok Sabha MP, has urged the finance ministry to "take drastic steps against big industrial houses who are defaulters."

"The overdues of Rs 40,924 crore, as on 31st March 2008, rose to Rs 54,178 crore, as on 31st December 2009, a shocking increase of 32.39 per cent," wrote Mahajan, who's also chairperson of the standing committee on rural development, in a letter written to finance minister Pranab Mukherjee.

Mahajan also wondered why should government not take action against CMDs/EDs and entire board of directors of banks that sanction huge loans to the big industrial houses without adequate due diligence.

The MP was critical of the Reserve Bank of India (RBI) for not taking effective steps to protect the depositors and investors of banks. "Why not blacklist the entire group who is sitting on huge credit limits from the banks," she demanded.

Mahajan also raised the issue of middle level management staffs and their exploitation by the top hierarchies of the banks. “I want to know why these measures are not applicable in the case of CMDs of banks who put pressure on middle management to recommend huge limits to protect their own interests,” she wrote.

Mahajan, who represents Indore in the Lok Sabha, noted that the NPAs of the nationalised banks had been increasing over the years. “It is also observed that out of 27 nationalised banks, only in six banks the increase was less than 10 per cent; in eight nationalised banks the increase was more than 50 per cent of the last year's overdue figures,” wrote Mahajan, citing official data.

The MP also noted that 40 per cent of the nationalised banks were incurring losses due to NPAs and demanded that overdues be recovered. “The increase of overdues/NPAs is more than 50 percent in 8 nationalised banks, while the Indian Overseas Bank it goes up to 104 percent as compared to last year."
She also wanted to know about the role of top private banks and foreign banks operating in India and their investment in the country.

The government is reportedly considering giving more powers to the banks for speedy loan recovery and is likely to present a proposal to that effect before the Cabinet.