Raghuram Rajan Blames UPA Corruption - Lauds Modi Govt's Write-Offs
According to former bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW">reserve bank of india governor raghuram Rajan, the primary cause of bank non-performing assets under the UPA administration was corruption. He commended the Modi administration for resolving the UPA-era problem and assisting banks in their write-off recovery.
"Look, we are going to have these bad loans, and they need to come out," I told the late arun jaitley, who was the Finance minister at the time. If not, they will prevent the system from lending and cleaning up. In a recent interview with The Print, Rajan stated, "You want the system to move forward."
"Fine, go ahead," was Jaitley's encouraging response, and the procedure started.
"Look, we are going to have these bad loans, and they need to come out," I told the late arun jaitley, who was the Finance minister at the time. If not, they will prevent the system from lending and cleaning up. In a recent interview with The Print, Rajan stated, "You want the system to move forward."
"Fine, go ahead," was Jaitley's encouraging response, and the procedure started.
Many initiatives that had been initiated earlier were in difficulty after the financial crisis. According to Rajan, india also had problems outside of the global financial crisis, such corruption scandals that resulted in lengthy wait times for clearances.
"Land, environmental permits, etc., were not being obtained for projects. Thus, they were increasing non-performing assets (NPAs) in the financial system, which is common during a time of elation and exuberance," he stated.
Concerns About Inflation Remain, Says raghuram Rajan
"Land, environmental permits, etc., were not being obtained for projects. Thus, they were increasing non-performing assets (NPAs) in the financial system, which is common during a time of elation and exuberance," he stated.
Concerns About Inflation Remain, Says raghuram Rajan
Project timelines grew considerably once the crisis struck. The RBI established a policy permitting a pause on designating loans as non-performing during the term of my predecessor. But as a result, banks were able to retain large portions of problematic loans without realizing it," he said.
"We recognized that prolonging and pretending would lead to more serious issues later on, so the moratorium ended during my first year in 2014." We have to clean up since, historically, this strategy has always resulted in problems," Rajan stated.
He went into detail about starting the Asset Quality Review, which included looking into each bank's books to make sure that borrowers were treated consistently throughout the banking system.
"We recognized that prolonging and pretending would lead to more serious issues later on, so the moratorium ended during my first year in 2014." We have to clean up since, historically, this strategy has always resulted in problems," Rajan stated.
He went into detail about starting the Asset Quality Review, which included looking into each bank's books to make sure that borrowers were treated consistently throughout the banking system.
"That alone was sufficient to uncover several loans that were genuinely poor and were recorded as functioning on the books. We had given them some wiggle room, of course, but they had exploited us more than we had anticipated," he stated.
"So, a lot of bad loans came tumbling out," Rajan continued.
The former governor of the RBI stated that this cleaning was essential. The economy was receiving less credit from the public sector. According to him, banks would be reluctant to offer decent loans if these problems weren't resolved because their balance sheets were overflowing with bad loans.
"So, a lot of bad loans came tumbling out," Rajan continued.
The former governor of the RBI stated that this cleaning was essential. The economy was receiving less credit from the public sector. According to him, banks would be reluctant to offer decent loans if these problems weren't resolved because their balance sheets were overflowing with bad loans.
Rajan emphadata-sized that the asset quality assessment required two hands: one from the government to capitalize the banks and one from us to identify the problematic loans.