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RBI board needs to play like Rahul Dravid, not Sidhu: Raghurm Rajan

November 6, 2018 6:02 pm by: Category: BATH CHEETH, SLIDER NEWS Comments Off on RBI board needs to play like Rahul Dravid, not Sidhu: Raghurm Rajan A+ / A-

On disclosure of wilful defaulters’ names, Rajan said he’s ‘not well-versed to understand why those
names can’t be made public’
‘If frauds go unpunished, it simply encourages more fraud,’ the former RBI governor added.

Raghuram RajanNEW DELHI: Amid reports of tensions between the Centre and the central bank over
a host of issues, former RBI Governor Raghuram Rajan has suggested that the RBI
board needs to play like Rahul Dravid, also called “Mr. Dependable”, and “certainly”
not like Navjot Singh Sidhu, a cricketer turned politician known for his “loud”
comments.
In an interview with a news channel, Rajan said “Both sides have to listen to each
other and respect each one’s turf. What is more worrisome is the change in the role
played by the RBI board in all this. RBI board is not an operational board, it is not led
by professionals supervisors or central bankers. These are people from all the
different box in life whose main role is to advise people, to council … to play a Rahul
Dravid, to coach in some sense. But not to make operational decisions and certainly
not be loud like (Navjot Singh) Sidhu.”
Rajan further said that “I’m very worried about the change in it as they (RBI board
members) are supposed to be the wise people who bridge differences, rather than
force greater ones. We’ve had excellent people on its board and there are still very
good people on those boards. So I would hope that they would come together to
bridge these differences and reduce some of the noise that is coming. I don’t think
India should have a breakdown in the dialogue between the central bank and
government.

On disclosure of wilful defaulters’ names, Rajan said “Issue of fraud is not necessarily
the same as willful defaulter. Wilful defaulter doesn’t want to pay but hasn’t run away
with the money. Full arm of law should be applied to bring frauds to book, it’s work in
progress.”
On the issue of making the list of defaulters public, Rajan said that he is “not wellversed
to understand why those names can’t be made public”.

“If frauds go by unpunished, it simply encourages more fraud. If there is a sense that
there is no place on earth where you can hide because the long-arm of the Indian law
will come after you, I think it will send a very sound message,” he said.
On lending for small businesses, he stated that MSMEs (micro, small and medium
enterprises) are hard to lend to, which is why they are always clamouring for more
funds. The right way to give improve the credit process but not relax the credit
standards. Right way to get funds to MSMEs is by improving business environment
they operate in. The worry is that Mudra loans NPA are far bigger than we think.”

On supervision of public sector banks, Rajan said, “There is room for improvement in
all sides on the governance of banks, both in the public sector and the private sector,
and recognise the level of NPAs.”
Commenting on whether the PCA (Prompt Corrective Action) norms be relaxed or
not, he said, “Basel norms are flexible for some conditions but very stringent versus
other Indian rules. RBI as a professional institution must be trusted for putting 11
banks under PCA.”

Reports of tensions between the government and the Reserve Bank came to the
fore last month after a scathing speech by a top RBI official blew the lid off a fractious
dispute between the bank and the government of Prime Minister Narendra Modi on
issues ranging from lending curbs, more cash availability to the non banking finance
companies (NBFCs) to who controls the institution’s reserves.
That speech by RBI deputy governor Viral Acharya roiled markets and prompted the
government to issue a statement in support of the central bank’s autonomy. Many
viewed Acharya’s comments as a sign that the RBI was pushing back hard against
government pressure to relax its policies and reduce its powers ahead of a general
election due by May

RBI board needs to play like Rahul Dravid, not Sidhu: Raghurm Rajan Reviewed by on . On disclosure of wilful defaulters' names, Rajan said he's 'not well-versed to understand why those names can't be made public' 'If frauds go unpunished, it sim On disclosure of wilful defaulters' names, Rajan said he's 'not well-versed to understand why those names can't be made public' 'If frauds go unpunished, it sim Rating: 0
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