NEW YORK: India’spublic sector banks(PSBs) had the ” worst phase “under the” combination “of former Prime MinisterManmohan Singhand formerRBIgovernorRaghuram Rajan, and giving the ailing banks a “lifeline” was her primary duty now, finance ministerNirmala Sitharamanhas said.
PSBs have been grappling with bad loans and the government has been taking measures to address the issue. In August, the government announced an upfront capital infusion to the tune of Rs 70, 000 crore into public sector banks. Besides, 10 PSBs are being consolidated into four.
Delivering a lecture at the Columbia University’s School of International and Public Affairs here on Tuesday, Sitharaman said, “While economists can take a view of what prevails today or prevailed years ago, I will also want answers for the time when Rajan was in the governor’s post speaking about the Indian banks, for which today to give a lifeline is the primary duty of the finance minister of India. And the lifeline-kind of an emergency has not come overnight. “
“I do respect Raghuram Rajan as a great scholar who chose to be in the central bank in India at a time when the Indian economy was all buoyant, “she said in the lecture.
Asked about the ex-RBI governor’s recent comments during a lecture at Brown University in which he had apparently mentioned that in its first term, theNarendra Modigovernment had not done better on the economy because the government was extremely centralized and the leadership didn’t appear to have a consistent articulated vision on how to achieve economic growth, the minister said instead there were major issues with bank loans during Rajan’s tenure as the central bank head.
“Dr Singh was the Prime Minister and I’m sure Dr Rajan will agree that Dr Singh would have had a ‘consistent articulated vision’ for India, “she said. Sitharaman said while she is grateful that Rajan did an asset quality review, people should know what makes banks ailing today.
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