Ex-RBI Governor Attacks India’s Banking System, Calls Out For A Transparent System
Ex-RBI Governor Attacks India’s Banking System, Calls Out for A Transparent System!
Ex-Reserve Bank of India Governor, Raghuram Rajan believes it’s time to put an end to India’s flawed banking system. Rajan was not all talk, as he allegedly wrote out his thoughts in a letter that has since been sent out to India’s Chairman of Estimates Committee and the Prime Minister’s Office to ensure they are put into action.
As per News.Bitcoin.com, Rajan is fed up with the number of frauds that have taken place within the public banking system. The letter supposedly lists a variety of tools in which the problem of fraud can be dealt with. Furthermore, ideas for consequences (given the lack of compliance) were presented as well as “swift enactment of the Bankruptcy Code and an Asset Quality Review process.”
An Indian-based payments firm, FIS was quoted, in which they found that most victims of fraud fell in the age bracket of 27 to 37 years. There also existed a high correlation between victims and their reliance on digital banking apps.
This isn’t the first time Rajan openly blamed the banking system in India. A post written on Tuesday, September 11, by an Indian news outlet, India Today, wrote that Rajan blames Indian banks’ non-performing assets (NPAs). He deems the handing out of loans is a simple example of the banks’ “failure in monitoring”. As per Rajan:
“Too many loans were made [given to well-connected promoters who have a history of defaulting on their loans [sic],” adding that “Public sector bankers continued financing promoters even while private sector banks were getting out [of financing the said promoters].”
The Ex-RBI Governor also shared his experiences in his previous role, noting that India’s central bank also needed to better in the times to come. Rajan believes that they “probably [could] have raised more flags about the quality of lending in the early days of banking exuberance.”
Transparency seems to be the reoccurring problem in India’s banking system, so what measures will actually be taken? While the set of tools listed in the letter has yet to be revealed, it would be interesting to see if blockchain technology and cryptocurrencies have made the list, as the duo are known for its decentralized, transparency, security and privacy features.