Former RBI governor Urjit Patel while speaking at an event in Stanford University on Wednesday (3 June) pointed the finger at the erstwhile UPA government over failing to prevent over-lending by the state-run banks which precipitated the NPA crisis, Press Trust of India has reported.
While listing out the aforementioned areas of concern for India’s banking sector, including which he called overstated capital buffers, Patel said that, “How did we get here? Plenty of blame to go around! Prior to 2014, all stakeholders failed to play their role adequately. Banks, the regulator and government”.
Without directly naming the UPA government, Patel claimed that the government did not fully play its role in preventing over-lending by banks.
Patel thus advised that the government and various stakeholders need to continue following the course of an asset quality review and resolution of NPAs - which began post 2014, despite challenges. He warned that back-peddling and delayed resolutions on part of the banks could come back to haunt the sector.