RBI Governor Raghuram Rajan addressing industry representatives in Bengaluru.
RBI Governor Raghuram Rajan addressing industry representatives in Bengaluru. Here are the highlights:
- RBI Governor Raghuram Rajan defends his rate regime.
- Raghuram Rajan says public sector banks are not lending due to stress which is not letting the credit growth pick up.
- Slowdown in credit growth has been largely because of stress in public sector banks and not by high interest rates.
- Have seen a slowdown in lending by public sector banks vs private sector banks.
- Public sector banks are shrinking exposure to infra & industry due to bad loans.
- Don't throw good money after bad money simply because there is an unreliable promise that debt will become serviceable.
- Distorted incentives in public sector banks lead to over lending to or "ever-greening" unviable projects.
- We want the banks to be realistic about project's cash generating capacity.
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