The Times of India|Aug 10 2016

Former RBI governor D Subbarao said the merger of associate banks with State Bank of India will not have any impact on non-performing assets (NPA) held by them. He said that the merger would result in combined NPAs. “From a NPA perspective the merger will not make a difference,“ he said.

Delivering the Centre for Public Policy Research’s (CPPR) 12th quarterly lecture on Tuesday Subbarao said “RBI governor Raghuram Rajan has put in efforts so that banks disclose stressed assets.“ He said Rajan’s efforts did not create the problem; and the RBI was trying to address the issues related to NPAs.

He said that corporates that borrowed money and banks which gave money `went into unchartered territories’, which eventually led to mounting NPAs. In reply to a question he said the issue would be sorted out. “New capital has to be brought to banks. That capital has to be invested by the government,“ he said wondering whether the government would be able to bring in capital considering its limited resources. “The point is that so much money is required,“ he said.

On a question on financial inclusiveness he said it would depend on every house getting a bank account and how they use it meaningfully . “In November 2012, Ernakulam celebrated 100% financial inclusion. When we conducted a survey on how many people were actually using bank accounts it was revealed the people still went to money lenders and were buying gold for savings.“

Regarding `on tap’ universal banking licence he said, “Everybody believes India is under banked. There must be all kinds of banks. I believe this is a good thing.“ He said that though there were would be many applicants, but “not many will meet the criteria“ set by RBI.

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News related to the CPPR’s 12th Quarterly Lecture in other print media are as follows


 

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