[ad_1]
Former RBI governor Raghuram Rajan reportedly blamed "excessive banker optimism" and the "slowing growth" of non-performing assets (NPAs) in his response to the Lok Estimates Committee. Sabha, consisting of 30 members. The panel, led by BJP veteran Murli Manohar Joshi, asked Rajan for a briefing on rising bad debt in the banking sector.
According to CNBC-TV18, Raghuram Rajan told the panel that the banks were not "due diligence" on large loans and relied on the promoter, SBI Capital Markets and IDBI. The former governor of the RBI added that the slowdown after 2008 made the banks' growth projections unrealistic.
Rajan reportedly accused the policy of paralysis that delayed ongoing projects due to the slowness of decisions made by the UPA government after he was accused of various scams.
The former head of the RBI would have learned that banks have granted more loans to prevent "zombie" loans from transforming non-performing assets. Laws did not allow banks to seize property and banks opted for life loans, Rajan was reported to have said.
By holding the banks accountable, the former head of the RBI said that the high NPAs were due to the exuberance, incompetence and corruption of the bankers. He also blamed the lack of follow-up and extension of loans to companies that had a history of default.
Bad loans reached Rs 8.99 lakh crore as of December 31, 2017, with PSBs accounting for over 86% of the pie.
Rajan, who served as RBI's governor for three years until September 2016, is currently Distinguished Professor Katherine Dusak Miller in Finance at the Chicago Booth School of Business.
A member of the committee told India Today earlier that Joshi wrote a letter to Rajan on August 7, saying that the committee admired his experience and knowledge and if he was unable to testify in person, the committee would like testimony writes from his expert point of view on the NPA crisis, how it was created and how India should deal with it ".
Refuting the notion of slow credit growth during his tenure, Mr. Rajan said PSU's retail and housing loans had not slowed despite the Asset Quality Review (AQR).
Niti Aayog Vice President Rajiv Kumar recently said that the demonetization, but the deleveraging of credit under Rajan's mandate, has led to an economic slowdown.
Blaming the blame for Rajan's policy as governor of the central bank, Kumar said that economic growth was declining due to rising NPAs in the banking sector. "When this government came into office, that figure was about 4,000,000 crore, it reached 10.5 lakh crore in mid-2017," he added.
"Under former RBI governor Raghuram Rajan, they had instituted new mechanisms to identify stressed and non-performing assets, which is why the banking sector stopped giving credit to the sector. credit has been reduced to 1% in some neighborhoods, "said Niti Aayog vice president.
"This has been the largest deleveraging of commercial credit for the industry in India's economic history," Kumar said.
Source link
