CAG on NPA crisis in banks |
Comptroller and Auditor General of India (CAG) Rajiv Mehrishi has questioned the role the of Reserve Bank of India in the present banking crisis, asking what the regulator was doing when the banks were lending huge amounts that resulted in asset-liability mismatch and huge bad loans. The banking sector had non-performing assets (NPAs) or bad loans worth over Rs 9.61 trillion by the end of 2017-18. The major cause of current banking crisis is huge asset liability mismatch; but nobody is talking about this, there is a lack of public policy debate, Mehrishi said.He said India lacks a flourished bond markets in absence of which the banks are forced to lend to long-gestation infrastructure projects. And when these projects run into any hurdle, their difficulties percolate into the difficulties of the banks, he said. The CAG also pointed out that there is a lack of public policy debate or a narrative on the root causes of the banking crisis; and also, nobody is talking or writing about the role of the regulator. Despite from banks` own mismanagement as well as theft of public money which are amongst the reasons behind the banking sector mess, there is much more to this which is complex to understand.
|
|
|
|