Ex-RBI governors warn of NPAs delaying recovery - Times of India
MUMBAI: Domestic banks, which have the highest bad loan pile in the world, pose a huge risk to the recovery of the pandemic-ravaged economy unless the government rescues them, four former Reserve Bank governors warn in a soon-to-be-released book. While Raghuram Rajan blames excessive investments by companies and the exuberance of bankers, coupled with inability to act fast as the prime causes for NPAs (Non-Performing Assets), Yaga Venugopal Reddy opines that the bad loans are not only a problem but a consequence of other problems. Duvvuri Subbarao sees NPAs as a big and real problem that needs to be contained, and Chakravarthy Rangarajan blames the lingering real sector problems, partly policy-driven most recently seen with demonetisation, aggravated the crisis. "Yes, the bad loan problem is big and real," says Subbarao, who was the governor for five years from September 2008 to September 2013, in the book by senior journalist Tamal Bandyopadhyay titled 'Pandemonium: The Great Indian Banking Tragedy'. The author has interviewed the four former governors for the book that will soon be launched by Roli Books. And all of them say what is also big and real is the fiscal constraints of the government, pointing to its very weak finances crippled by the pandemic. State-run banks are in bad shape despite getting Rs 2.6 lakh crore in fresh capital in the past few years alone. Read the full article