Make RBI the Big Brother

The RBI is rightly exercised over the rising contaminated assets of banks. However, its efforts at containing them have not proved very effective so far. Despite the Annual Financial Inspections, discussions with bank managements, involvement of credit rating agencies, the situation has not improved. It cannot be gainsaid that the bankers work under pressure from various quarters, not excluding ministers, bureaucrats, retired bankers as also the borrowers themselves who offer various types of enticements. One effective way to arrest the growth of NPAs is for the RBI to revive the Credit Monitoring Arrangement that was withdrawn in the mid-2000s. That was the point at which the RBI was in a position to counsel the bank where it has gone wrong in its credit assessment and what steps are needed to be taken to set matters right.

- A B TELANG (ET)