March 24, 2018

Raghuram Rajan willing to come back if it makes big difference

09 September 2017, 02:45 | Kenneth Drake

Former RBI Governor came back to India to exchange old notes

Raghuram Rajan

"One indication of having achieved this would be the day when we can shut down the (Finance Ministry's) Department of Financial Services", said Rajan who was the Governor of Reserve Bank between September 2013-September 2016.

Dr Rajan told NDTV that he and Mr Kumar "have had some very good conversations in the past".

"We need independent and professional boards in public sector banks. independent of the government".

Speaking during the promotion of his book "I do what I do" Rajan said, "The role of the regulator is to ensure that once the loan is made if it gets into trouble that the trouble is recognised early".

When asked that despite the RBI's caution the government moved ahead with the demonetisation, Rajan said that the Centre does not need the RBI's permission.

Former RBI governor Raghuram Rajan said that bankers were still refraining from taking action against errant borrowers fearing that they would be investigated.

But he also acknowledged that it is hard to single out the program's impact on the economy, as there are two other major dampeners on India's growth: A high level of debt and short-term uncertainty caused by the implementation of the goods and services tax. "My sense was that there was still time to persuade the government otherwise", he said.

Rajan, on the sides of his book launch "I do What I Do", said that Non Performing Assets (NPA) issues are far from resolutions with banks failing to take action against the promoters.

He, however, said that cost of demonetisation was 1-2 per cent of the GDP.

"We are in La-La Land when you talk like that", he said. "I would prefer that we establish another 10 years of very strong growth of 8-10 per cent".

When asked if he would be willing to return to India for another position or was happy teaching in the US, Rajan said he is not special among the diaspora and there were many people who, if called upon, would come back and do what is necessary. "Ya, if called upon and if there is a place where you can make a big difference, of course", he said.

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