In a sign that the vital assembly Reserve Bank of India board Monday could see fireworks involving the RBI and authorities nominees, swadeshi ideologue and independent manager S Gurumurthy on Thursday went public with his sharp criticism of many policies of this Urjit Patel-led principal bank.
Gurumurthy, whose nomination on RBI’s central plank had triggered a controversy, blamed the central bank for mandating one-shot provisioning (or putting aside funds) for bad loans. “NPA was growing since 2009 and it appeared in 2014. At the point RBI didn’t say’you supply’ but in 2015 it stated’you supply’. Thus, supplying at one move is your issue. If they’d stated you supply more than five years that this would not have occurred,” he explained.
Rather, he endorsed a more gradual approach. “Any policy which lacks gradualism will constantly create consequences, can encourage a crisis where none exists. You wish to avert a catastrophe by coverage but the exact same policy can also bring a catastrophe and this balance hasn’t been kept in forcing NPA provisions”
The statements came from the context of Gurumurthy’s complete assessment that India was a bank-driven market, such as Japan, and also the policies couldn’t be as market-driven as was the situation with the United States.
“The standoff involving RBI and the government isn’t a happy thing whatsoever… An alternate is essential and it is also… This is a portion of the general correction of the Indian mentality,” he explained during a discussion in the Vivekanada International Foundation.