Although he has turned down these speculations in the past, Raghuram Rajan is still among the top picks for the next governor at Bank of England. Indian banks, which had completed one painful cycle of bad loan recognition half a decade ago, are prepared for another shock.HDFC Bank recently said it plans to raise up to Rs 50,000 crore via unsecured perpetual debt instruments, Tier II capital bonds and long term bonds in the domestic market.
Hence, the only way to prepare for a possible spike in bad loans is to augment capital and make upfront provisions.
"Our government says it will come in with the money eventually when the economy is opening up fully, but by that time a number of these entrepreneurs may not have the resources to continue and may have closed," he warned.He also said that "Aatmanirbhar" programme is a good initiative but India has to first rectify its deficiencies. In India, it isn’t an exaggeration to say that Rajan’s tenure as RBI governor between 2013 and16 changed the course of banking sector with the introduction of early identification of stressed assets and the subsequent implementation of asset quality review (AQR) in 2015. Raghuram Rajan has said that the government’s plan to monetise debt using banks’ liquidity with the Reserve Bank of India’s help may not be sustainable. The culture of hidden NPAs, deep rooted in the Indian banking system, was exposed mercilessly.The effect of this will be much severe on state-run banks which are at the mercy of the government for survival capital. Raghuram Rajan is the Katherine Dusak Miller Distinguished Service Professor of Finance at Chicago Booth. The books he has written include The Third Pillar: How the State and Markets are leaving Communities Behind 2019, I do What I do: On Reform, Rhetoric, and Resolve, 2017, and Fault Lines: How Hidden Fractures Still Threaten the World Economy, for which he was awarded the Financial Times-Goldman Sachs prize for best business book in 2010.Dr. Dr. Rajan’s research interests are in banking, corporate finance, and economic development, especially the role finance plays in it. Former Governor of Reserve Bank of India, Raghuram Rajan on Thursday said the central bank has been expanding its balance sheet and buying government debt on the back of excess liquidity amid the economic slowdown but cautioned that this comes at a cost and cannot be a lasting solution. He was the 23rd Governor of the Reserve Bank of India between September 2013 and September 2016. The former RBI governor and IMF chief economist is credited with predicting the 2008 global financial crisis. To an extent, the RBI has already begun this process.One must understand the context of Rahan’s comment-- the gross uncertainty surrounding COVID-19 in the domestic economy.
When people start fearing the extent of monetisation that is going on, when they start worrying about inflation, when they start worrying about whether the debt that has been accumulated will be paid back. And unfortunately thus far, I can see some possibilities that have been announced in agriculture but we need far more elsewhere," Rajan said, speaking at a Linkedin interaction.The interaction was on COVID-19 impact on economies and the way forward. He was the 23rd Governor of the Reserve Bank of India … The other awards he has received include the Infosys prize for the Economic Sciences in 2012, the Deutsche Bank Prize for Financial Economics in 2013, Euromoney Central Banker Governor of the Year 2014, and Banker Magazine (FT Group) Central Bank Governor of the Year 2016.Raghuram Rajan is the Katherine Dusak Miller Distinguished Service Professor of Finance at Chicago Booth. Former RBI Governor Raghuram Rajan jumped into Yes Bank debate, reinforcing the burden of accountability on the government for the resolution of the crisis. Former Reserve Bank of India Governor Raghuram Rajan has weighed in on the debate over whether the Indian central bank should monetise the government’s additional financing requirements amid the Covid-19 crisis. if that can be done for the next few years, if we can reform in an effective way, not verbal but actual implemented reforms on the ground, I think we have a strong chance," Rajan, who now teaches at University of Chicago in US, said.Bold government reform that triggers animal spirits and implemented effectively on the ground is essential for India to come out of the COVID-19 setbacks, former RBI Governor Raghuram Rajan said on Thursday.He also said that this could be helpful in a time like this in creating the perception that India will grow going forward.As per some estimates, economic growth is expected to contract by as much as 9.5 per cent in FY21 due to the coronavirus pandemic. MUMBAI: Former Reserve Bank of India (RBI) governor Raghuram Rajan has said that, instead of closing the insolvency option completely for Covid defaults, borrowers should have been allowed to renegotiate the loans under the bankruptcy platform and retain their businesses. Between 2003 and 2006, Dr. Rajan was the Chief Economist and Director of Research at the International Monetary Fund. Global rating agency, Standard and Poor’s expects gross NPAs of Indian banks to spike to 14 percent in FY21 from around 8.5 percent in FY20.
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