Interim Corporate Affairs Minister Piyush Goyal on Friday said the government has put a stop to the practice of pressuring banks to advance loans as part of its effort to better corporate governance standards among public banks.
"We are proud to say that in these four years of this government, we have stopped the phone-call thing coming in from Delhi to the banks," Goyal said, responding to on corporate governance failures, mainly in banks, during the Question Hour in the Lok Sabha.
Goyal said, "Not a single phone call will go (to banks) to give a loan, to address a loan, to restructure a loan or to settle a loan. We have given autonomy to the banks."
For the first time, an honest asset quality review was carried out in 2015 that forced the banks to show non-performing assets (NPAs) which in earlier years were restructured and never reflected the true picture of the banks, he said.
Further, Goyal said the government has taken several measures to uphold corporate governance and have been strictly dealing with shell companies and defaulters.
"It is probably for the first time in history of India that a government has come down so strongly on non-active companies, called shell companies in common parlance," he said. The government has struck off 2.26 lakh such companies from the register and has identified another 2.35 lakh companies that are under the scanner.
"It is only under this government that big defaulters are being brought to book," he added.