Raghuram Rajan Blames 'Over Optimistic Bankers' and 'Policy Paralysis' for Mounting Bad Loans
New Delhi, Sept 10: Former RBI governor Raghuram Rajan has blamed the “over optimism of bankers” and “policy paralysis” for mounting non-performing assets (NPAs) in his reply to a parliamentary committee which had sought his views on the pressing issue.
In a report, CNBC TV-18 quoted sources as saying that Rajan told the Murli Manohar Joshi-led panel that banks didn’t do “due diligence” on large loans and the post-2008 slowdown made their growth projections quite unrealistic
Fmr @RBI Guv Raghuram Rajan sent note on causes, cures of NPAs to Estimates Committee, says NPAs caused by bankers' over-optimism, growth slowdown: Sources to @latha_venkatesh #CNBCTV18Exclusive
— CNBC-TV18 (@CNBCTV18Live) September 10, 2018
Alert: Estimates Committee had requested Rajan for his take on NPAs pic.twitter.com/C7CiRuL8S3
The former RBI chief is also learnt to have said that banks extended more loans to prevent ‘zombie’ loans from turning non-performing assets.
The Parliament's Committee on Estimates had invited Rajan to brief it on the matter after former Chief Economic Advisor (CEA) Arvind Subramanian praised him for identifying the NPA crisis and trying to resolve it.
Rajan, who was RBI governor for three years till September 2016, is currently the Katherine Dusak Miller Distinguished Service Professor of Finance at Chicago Booth School of Business.
#CNBCTV18Exclusive | Rajan on his note to the committee adds PSU banks personal & housing loans didn’t slow despite Asset Quality Review (AQR) pic.twitter.com/0awI4mSY4C
— CNBC-TV18 (@CNBCTV18Live) September 10, 2018
The panel has already questioned senior finance ministry officials, including Finance Secretary Hasmukh Adhia and top brass of banks, about rising bad loans.
Members of the panel also demanded various documents including minutes of the board meetings of the public sector banks, in which high-ticket value loans were approved. The banking sector is grappling rising non-performing assets, which touched Rs 8.99 trillion or 10.11 per cent of the total advances at December-end 2017.
#CNBCTV18Exclusive | Raghuram Rajan on his note to Estimates Committee says had sent list of high-profile fraud cases to PMO for co-ordinated investigation pic.twitter.com/U5nEeGlvlD
— CNBC-TV18 (@CNBCTV18Live) September 10, 2018
Of the gross NPAs, the public sector banks accounted for Rs 7.77 trillion. The rising number of banking frauds has also become a serious cause of concern.
Courtesy: www.news18.com
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CM Siddaramaiah alleges ‘criminal conspiracy’ in Sringeri recount, vows legal action
Bengaluru (PTI): Alleging a “criminal conspiracy” by BJP candidate D N Jeevaraj in the Sringeri Assembly poll recounting, Karnataka CM Siddaramaiah on Tuesday said the outcome was manipulated after valid postal ballot votes in favour of Congress leader T D Raje Gowda were tampered with during the recounting process.
Following a Karnataka High Court order on an election petition filed by Jeevaraj, challenging Raje Gowda’s election, the reverification and recounting were conducted on Saturday.
After the reverification and recount of postal ballots for the Sringeri Assembly constituency, votes polled in favour of Raje Gowda were reduced by 255, the returning officer said.
A report on the matter has been submitted to the Election Commission of India for further action, the officer added.
Congress leader Raje Gowda had won the 2023 Assembly polls from Sringeri by 201 votes, defeating his nearest rival Jeevaraj.
Addressing a press conference in Bengaluru, Siddaramaiah said the High Court had directed the recounting of postal ballots and that irregularities were noticed during the exercise conducted on May 2.
“This is a clear case of criminal conspiracy,” Siddaramaiah said, alleging that valid votes cast in favour of Raje Gowda were altered after being accepted by counting agents of all parties, including Congress, BJP, and JD(S).
He claimed that during the recounting of postal ballots, 255 votes were initially accepted as valid by all agents but were later tampered with by subordinate officials.
“There is a second mark on the votes polled in favour of Raje Gowda. They had accepted these as valid votes. Subsequently, another mark was made by officials. This is a clear case of criminal conspiracy,” he said.
When asked who was behind the alleged conspiracy, the CM replied, “It was hatched by Jeevaraj and others. It is planned.”
Siddaramaiah further alleged that the returning officer acted improperly by declaring the result despite the presence of an Election Commission observer during the recounting.
“Immediately after the counting, the returning officer announced the result. He should not have done so; this is against the law,” he said.
He pointed out that Raje Gowda had originally won by 201 votes, but after the recounting, the BJP candidate was declared the winner by 52 votes.
“The BJP has committed a criminal act of conspiracy. This is not vote chori but vote dacoity,” he alleged.
The CM said a police complaint had already been filed by Raje Gowda’s election agent, Sudhir Kumar, and emphasised the need for electoral integrity.
“We want transparency and free and fair elections. That is what our Constitution mandates,” he added.
Stating that the government would pursue legal remedies, Siddaramaiah said, “We are preparing an appeal challenging the returning officer’s announcement in a court of law.”
Responding to a separate query on elections in other states, the CM said there appeared to be an anti-incumbency factor in West Bengal, while results in Tamil Nadu were “surprising,” adding that Vijay’s party was emerging as the largest there.
Following the victory of party candidates in Bagalkote and Davanagere South, Siddaramaiah expressed confidence about future electoral prospects in Karnataka.
“Even in 2028, we will win the Assembly elections. We will come back,” the CM said.
Siddaramaiah added that he would order a forensic examination into the alleged tampering of postal ballots.
