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RBI looked the other way when banks lent freely, ran up NPAs: Jaitley

  •   Tue, Oct 30 2018 04:00:15 PM

New Delhi, Oct 30 (IANS): Finance Minister Arun Jaitley on Tuesday held the central bank responsible for the mountain of bad loans, saying the Reserve Bank looked the other way when banks lent indiscriminately during 2008-14 to keep the economy humming.

Jaitley's comments reflect a growing tension between the RBI and the government, days after the central bank Deputy Governor Viral Acharya made a bold pitch for autonomy and independence in the banking regulator's functioning.

The Finance Minister said that after the global financial crisis in 2008 and until 2014, banks were told to open their doors and lend indiscriminately to keep the economy going "artificially".

"The central bank looked the other way (when) there was indiscriminate lending... Total bank credit in India from Rs 18 lakh crore in 2008 went up to Rs 55 lakh crore by 2014. And this was something that banks couldn't sustain, the borrowers couldn't sustain and you had the NPA problem," Jaitley said at an event.

"I am suprised that at that time, the government looked the other way, the banks looked the other way. I don't know what the central bank was doing. It was a regulator of these. They kept pushing the truth below the carpet," he said.

"And we were told that the total NPA (non-performing assets) was Rs 2.5 lakh crore. But when we did the asset quality review in 2015, with the central bank doing it, we found that the NPA was already Rs 8.5 lakh crore," he added.

At a lecture on October 26 in Mumbai, Acharya stressed the need for independence in the central bank's functioning, saying that the market can make the government pay for eroding the bank's independence.
  

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Comment on this article

  • AMAR NATHAL, MANGALORE

    Tue, Oct 30 2018

    Now is the time RBI should come out and publish all the huge deposits that took place just before demonetization. We shall know the truth then how much political parties knew about it. Let the political parties tell us how much they received in cheques as this remains a top secret as per the law. Ordinary people have to disclose where as political parties, all political parties, want their source of money to remain a secret. That's how Ambani runs his business.

    DisAgree Agree [1] Reply Report Abuse

  • JML Joseph, Mangalore

    Tue, Oct 30 2018

    Can you imagine a Country as large as India having a part-time Finance Minister and a Part-time Defense Minister and also Part Time Corporate Affairs .

    Is it possible for a single person to do justice with 3 major portfolios. Was the BJP so hard up for appointing full time Ministers ?

    DisAgree Agree [1] Reply Report Abuse

  • KRPrabhu, Mangalore/Bangalore

    Tue, Oct 30 2018

    Mr.Jaitly is a failed finance minister ..Ill health of Indian banks post drmonetization is mainly due to failed/ mismanaged demonetuzation.
    Mounting npa after demonetization
    is mainly due to demonetuzation.Thousands of small business,industrial units closed and lakhs rendered jobless.Basically Jaitly is not fit for finance fortfolio.Whole banking system is destroyed hence present situation.Govt is doing one more blunder by merging BOB ,Dena and Vijaya Banks.
    Kumbaaranige varusha..donnege nimisha proverb fits well for Mr.Jaiyly.

    DisAgree [2] Agree [12] Reply Report Abuse

  • Vincent Rodrigues, Katapadi/Bangalore

    Tue, Oct 30 2018

    Jaitley,the Finance Minister of the country is trying to save his skin after the real exposure by RBI.

    DisAgree [1] Agree [12] Reply Report Abuse

  • Roshan, Mangaluru

    Tue, Oct 30 2018

    Modi led BJP is full of Bogus Propaganda machine. Every one is wrong except for themselves.

    This is a party pre-independence time wanted sainthood for Godse, been chamcha of British. Can any one say that was right thing to do? RSS is junked by none other than the Sardar Patel for their acts. Today it builds a statue with the help of Chinese, draining Indian taxpayers money. What a nationalistic thought.

    Even in contemporary times, it was the party that was against, Computerization, Nuclear Deal, Nationalization of Banks, Land reform act where the farmer becoming owner of land, GST, Aadhar etc., today brags all as its achievements. what a joke.

    Not just that, all mining mafia's are part of core committee of BJP, all bank defaulted run-away's are friends in one frame photo. Frustrating.

    Then comes the systematic poisoning of reputed institutions such as planning commission, EC, ED, CBI, Judiciary etc., Without a plan, without a strategy, without a policy, without an infrastructure and without any application of mind.

    Now, should India to vote to Modi led BJP in any election from panchayat to MP, it just shows lack of maturity nothing else.

    DisAgree [2] Agree [16] Reply Report Abuse

  • Joseph F. Gonsalves, Bannur, Puttur / Mangalore

    Tue, Oct 30 2018

    Demonetisation of Indian currency has made all white money from the black.

    We have been informed and noting from the news that the RBI sent money to Corporates with the instruction of P.M. and P.M.O.

    Dr. Manmohan Singhji has expressed his views on the day of demonetisation that the demonetisation is a mismanagement, a loot and plunder of peoples money.

    It is a biggest blunder ever committed since independence.

    Economists are well aware of that this kind of demonetisation doesn't work.

    Illiteracy of the Chaaiwaala Prime Minister of India has operated like what Rahulji said Mohammed Bin Tuglaq Raaj.

    A liar was made Finance Minister of India who doesn't know but to argue with his Motor-Mouth.

    His Master is rounding all over the world in the site seeing tours in citizens tax paid money

    DisAgree [1] Agree [9] Reply Report Abuse

  • El En Tea, Mumbai

    Tue, Oct 30 2018

    Juteleji where is the demonitized amount is gone.
    Why all the financial disaster happened after the 2014?

    DisAgree [1] Agree [6] Reply Report Abuse

  • Swamy, Mangalore

    Tue, Oct 30 2018

    The then govt may have lent loan to business people as a result the economy was doing very well till 2014 and no businesses were running in loss. No businessmen absconded and ran away from the country because of inability to pay back loan. But now you have no clue what you are doing with economy except threatening RBI to handover the profit and surplus to you illegally even to the extent of breaking rules and installing your own stooges in RBI to facilitate and make your task of fraudulence easier. RBI governor and his deputy are doing a fine job but your intervention is making thier job that much devastating. Your statements sound very silly and incompetent like school children complaining.

    DisAgree [1] Agree [9] Reply Report Abuse

  • prem, moodbidri

    Tue, Oct 30 2018

    First of all, tell us, what is bad loan?
    Do a borrower need to present their future plan of staying in country or running away, while applying for loan?

    It is not bad loan Jootley ji... it is ignorance, humanitarian ground & bad governance!

    Don't just blame Nehru and wash your hands off!!!

    DisAgree [1] Agree [21] Reply Report Abuse

  • Rudolf Rodrigues, Mumbai

    Tue, Oct 30 2018

    When you knew about it, sitting in the opposition why were you sleeping instead of making a big hue and cry and prevent it from happening?

    DisAgree [1] Agree [19] Reply Report Abuse

  • Antonio DSilva, Kuwait

    Tue, Oct 30 2018

    Seriously Mr. Jaitley? what have you been doing for the past 4 years?

    You replaced Raghuram with Urjit on 4th September 2016.

    Don't tell us Indians that you just woke up from your hibernation after seeing bad dreams of Indian economy.

    All bad dreams for us Indians are your creating, you and your bosses. Leave the RBI alone let them work out some solutions for the Indian economy.

    DisAgree [1] Agree [19] Reply Report Abuse

  • mohan, Mangalore

    Tue, Oct 30 2018

    That's why economy ....and you cannot do any thing...... now for vote bank you are holding falling economy by releasing reserve fund ......once voting completed again economy will fall.

    DisAgree [3] Agree [19] Reply Report Abuse

  • David Pais, Mangalore

    Tue, Oct 30 2018

    demonetisation was da real cause 4 banks npa's

    DisAgree [4] Agree [23] Reply Report Abuse

  • Desi Jawan, Mangalore

    Tue, Oct 30 2018

    Bad loans and loan waving politics are destroying banks.

    DisAgree [2] Agree [10] Reply Report Abuse

  • Mangalurian, Mangaluru

    Tue, Oct 30 2018

    The mega-fraudster Mehul Choksi's lawyer is Arun Jaitley's daughter.

    Arun Jaitley never mentions that fact.

    Instead he blames organisations like RBI for the mega-frauds!

    DisAgree [2] Agree [27] Reply Report Abuse


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