Raghuram Rajan note to parliamentary panel slams UPA mistakes; Congress blaming Modi for NPAs is bunkum

The political controversy over Raghuram Rajan’s note to Parliament committee chaired by Murli Manohar Joshi on the bank NPA problem is designed to divert the attention from the very problem itself to a useless mud-slinging show. Looking at the facts, there is a big irony in the Congress blaming Prime Minister Narendra Modi for the NPA mess and inaction over corporate loan fraud alert because it was during UPA I and II that all the alleged fraudsters were welcomed wholeheartedly with the blessings of the political leadership and went to on do business, be it Vijay Mallya, Nirav Modi or Mehul Choksi or anyone else. As Rajan said, the seeds of the present bad loan crisis were planted between 2006-08, when the UPA functioning led to increased NPAs in India’s banking structure. Just merely putting on a nice outfit to hide the rot beneath won’t make anyone healthy; that’s what precisely banks did all the time till Raghuram Rajan’s Reserve Bank of India, with the backing from the Modi-government, unleashed the biggest-ever bad loan clean-up process in 2014-15 with the introduction of a paper on early identification of stressed assets and eventually setting a deadline for banks to declare all their NPAs. Rajan’s letter to the panel on NPAs is a big condemnation of the UPA-era bad loan-making programme and the Congress party blaming Modi for the NPA problem is bunkum.