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Most bad loans from UPA era, banks to blame for NPA crisis: Raghuram Rajan
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Raghuram Rajan says an executive once told him he was " pursued" by banks, who waved chequebooks and asked him to “name the amount” he wanted in loans.
This revelation was part of the former Reserve Bank of India governor’s written response to a parliamentary panel, one full of stark, biting comments on Indian banks’ non-performing assets (NPAs).
Rajan said “…a larger number of [the] bad loans originated in the period [of] 2006-2008.” That will likely be used as ammunition by the ruling Bharatiya Janata Party to target the opposition Congress.
The Narendra Modi-led BJP government has long claimed that its Manmohan Singh-led Congress predecessor was largely to blame for Indian banks’ NPA crisis.
The parliamentary panel Rajan wrote to had sought his advice and “expert view” on the NPA crisis. According to estimates, Indian banks are currently burdened with bad loans that amount to more than Rs 10 lakh crore.
Rajan, who completed his term as RBI governor in September 2016, laid the blame for this mega NPA crisis on banks, labelling the handing out of loans as a “historic phenomenon of irrational exuberance”.
