Rajan snaps the NPA chaos

Rajan spoke for the second time in public after announcing a stepping down from the governor’s post. In a speech at ASSOCAM, Bangaluru, Rajan said that the clean-up of public sector banks and detention of frauds is the key to achieve a sustainable monetary system in the country.

Focusing on the resolution of financial distress he said that in his last two and half month tenure he would concentrate more on the prior obituaries rather than getting new ones. RBI is doing its job, now its high time that commercials take up their tasks on board, starting with their asset quality review.

Rajan Says,

·         Banks clean up policy defence to be finished in India

·         There is lack of proper due diligence

·         Will shortly licence number of new asset reconstruction companies

·         New bankruptcy law is important to improve resolution process

·         Govt needs to strengthen boards via banks board bureau

·         Imp banks do not use flexible scheme on people who habitually misuse it

·         Happy to know that PMO office is pushing prosecution of large frauds.

·         Lending to viable projects even if they are restructured

·         Slowdown in credit growth is due to stressed assets in public sector banks

·         Govt capitalisation bond in exchange for bank equity

·         Increase penalties for wilful defaulters in co-ordination with SEBI

·         It would be better that Govt capital be quickly infused into public sector banks

·         Have set up a Fraud Monitoring Cell

·         Working on framework of transparency of NPA price discovery

·         Improve governance of public sector banks