Did the ex-RBI chief fumble?

RAGHURAM G Rajan’s recent revelation that as Reserve Bank of India (RBI) Governor, he had submitted a list of high-profile fraud cases to the Prime Minister’s Office sounds like the confession of a gentleman-academician, who failed to act decisively. Ex-Governor Rajan cannot absolve himself by merely identifying and passing on the problem of hidden toxic liabilities to the PMO. He should have initiated the process by asking banks to take action and thereby compel the PMO to take coordinated action to bring at least a couple of Vijay Mallyas, Nirav Modis or Mehul Choksis to book. Both the RBI and its Governor enjoy considerable autonomy to withstand any undue political pressure against bringing culprits to book.  

While putting the onus on the PMO, Rajan has vicariously concealed the name of the regime leaving it to the people to guess. He was the RBI Governor not too far back — for three years till September 2016 — and yet he leaves it to our imagination whether his warning was sent to the Manmohan Singh or the Narendra Modi-led PMO, although he is lucid about the origin of non-performing assets (NPAs) in 2006-08. Naturally, both the Congress and the BJP have got the opportunity to trivialise the entire issue of NPAs by distorting his comments. In fact, Rajan should stop emulating politicians in making statements with loose ends. Either he should have withheld the recently revealed nugget or provided complete information to resolve the puzzle of NPAs and book the culprits.

Both Dr Rajan and his successor have been suitably vague right from the beginning. On December 16, 2014, two MPs had quoted then RBI Governor Rajan and asked if public sector banks were ‘hiding’ NPAs? Instead of sincerely examining the matter, Jayant Sinha, then minister of state for finance, seemed to sidestep the issue with a longwinded and politically-correct answer. Apparently, no regime has the political will to expose the ‘well-connected promoters’, who, according to Rajan, have a history of defaulting on their loans. The least they could do is to name and shame them.