Why parliamentary panel shot off letter to ex-RBI Governor Raghuram Rajan asking to appear before it

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Updated: August 20, 2018 10:40:31 AM

In an issue related with rising bad loans, former Reserve Bank of India (RBI) Governor Raghuram Rajan has been asked by a parliamentary panel to appear before it and brief about the matter.

Rupee at all-time high does not concern Raghuram Rajan; here's why he thinks rupee needs modest weakeningIn July, Arvind Subramanian appeared in the capacity of CEA to brief the panel on the mounting problem of bad loans. (Image: IE)

In an issue related with rising bad loans, former Reserve Bank of India (RBI) Governor Raghuram Rajan has been asked by a parliamentary panel to appear before it and brief about the matter, PTI reported.  Parliamentary Committee, headed by Murali Manohar Joshi, that is looking into the problem of mounting NPAs has asked former central bank head to appear after former Chief Economic Advisor (CEA) Arvind Subramanian praised him before the Parliament’s Committee on Estimates for identifying the NPA crisis and trying to resolve it, PTI report said.

A letter has been shot to the Rajan who left the a central bank in September 2016 after former CEA gave him the credit of identifying the problem of bad loans and resolving it, PTI repoted citing unidentified sources. Raghuram Rajan is currently working at the Katherine Dusak Miller Distinguished Service Professor of Finance at Chicago Booth School of Business.

In July, Arvind Subramanian appeared in the capacity of CEA to brief the panel on the mounting problem of bad loans. During the briefing, Subramanian had indicated that big loans by public sector banks (PSBs) were influenced. Nevertheless, he didn’t throw light on about how these approvals were influenced, the report said. Furthermore, he had also said that bankers were unwilling to lend in such an environment of fear.

The parliamentary panel has also already questioned Finance Secretary Hasmukh Adhia and top officials on the problem of rising bad loans. Various minutes among other documents were also demanded by the panel in which such high-ticket value loans were approved. NPAs recorded Rs 8.99 trillion or 10.11 percent of the total advances at end of December 2017. Of the gross NPAs, PSBs account for Rs 7.77 trillion of the gross bad loans.

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