RBI governor steps in to calm nerves
MUMBAI: Reserve Bank of India (RBI) governor Raghuram Rajan said on Thursday that the central bank and the government were determined to tidy up India’s problem of mounting bad loans by the next year but cautioned the solution might involve “deep surgery”.
“Our intent is to have clean and fully provisioned bank balance sheets by March 2017,” Rajan told a gathering of top bankers and business execu- tives in a meeting organised by the Confederation of Indian Industry (CII).
Rajan’s comments came on a day when India’s stock markets fell by over 3%, hammered by poor financial earnings of State Bank of India (SBI), the country’s largest lender. He said banks could either apply “band aids” and hope for projects to get back on track. “An alternative approach is to try to put the stressed project back on track rather than simply applying band aids. This may require deep surgery,” the RBI governor said.
CONTINUED ON P14
RELATED REPORTS, P17