Raghuram Rajan: Clean up bad debt held by banks to achieve stronger economic growth

By: | Updated: June 22, 2016 6:20 PM

RBI governor Raghuram Rajan today urged the country to clean up the bad debt...

RaghuramRajan urged state-run banks and company promoters to deal with the problem. (PTI)

RBI governor Raghuram Rajan today urged the country to clean up the bad debt held by its banks, calling it key to achieve stronger economic growth.

In a speech, the Reserve Bank of India Governor defended the actions taken by the central bank, including ordering state-run banks to conduct comprehensive asset quality reviews of their balance sheets.

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Rajan urged state-run banks and company promoters to deal with the problem, while also calling on the government to infuse capital to the sector – steps he has previously advocated during his tenure.

“To the question of what comes first, clean up or growth, I think the answer is unambiguously “Clean up!,” Rajan said in a speech to industrialists in Bengaluru.

The speech is his second public appearance since Rajan unexpectedly said that he will step down after his tenure ends in September.

With inputs from Reuters

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