Mumbai, 1 June-2014(PTI): Ahead of monetary policy review on Tuesday, Reserve Bank of India (RBI)…
MUMBAI: Reserve Bank of India (RBI) Governor Raghuram Rajan in a stern message to wilful defaulters on Friday said rich businesses owing large sums to banks should behave and not flaunt “massive birthday bashes” while still in serious debt.
In a reply to a question that India has borrowers too big to repossess, he said, “we are trying to change that. Let me emphasise that this is not about big businesses, not about rich people. This is not Robin Hood issue. This is an issue about the wrong doer amongst the community, who had raised the cost of borrowing for everybody.”
“If we can get those guys to behave … If you flaunt your massive birthday bashes etc even while owing the system a lot of money, it does seem to public that I don’t care”. This, he said, gives wrong message to the public at this point of time.
“If you are in trouble you should show that you care by cutting down your expenses and not flaunting more spending in public,” he told NDTV.
The governor further said that RBI was creating processes for banks to recover money.
Raghuram Rajan’s stern message to wilful defaulters: ‘You should behave and not flaunt money’
“Now we are pushing them to be more firm in their dealing with the borrowers and cleaning their balance sheets with idea that not to shut down firms but to put them back on track into an earning mode so that they can repay the banks,” he said.
Last month, RBI had asked banks to clean up their balance sheets by March 2017. They have been given more powers and flexibility to deal with bad loans, which crossed 6% mark as of June quarter.
The gross NPA of public sector banks rose to 6.03%
The Governor also appreciated the government’s recent programmes like Startup India and crop insurance.