New Delhi. Former Reserve Bank of India Governor Raghuram Rajan blamed the corruption and scams during the tenure of the Congress-led UPA government for the non-performing assets (NPAs) of banks. Raghuram Rajan, in his interview to The Print, claimed that the loans given by banks went bankrupt due to the wrong policies of the UPA government. Along with this, he praised the Modi government and said that former Finance Minister Arun Jaitley had helped in solving the problem of NPA. He told that when I informed Jaitley about this serious problem, he gave me a free hand, after which the cleaning of bank accounts was started.
File photo of Raghuram Rajan with Arun Jaitley.
Raghuram Rajan took over as RBI Governor in August 2013. After this, Narendra Modi government was formed at the center in 2014. The former RBI Governor said that before the global economic recession in 2008, banks did not hesitate at all in giving loans. He didn’t even do adequate due diligence. There was a time when bankers were after entrepreneurs to provide them loans. The situation worsened after the global recession. Not only this, NPA also accumulated due to wrong policies of UPA government. In fact, due to corruption, land was not available for projects, Environment Department did not give NOC, hence projects got stuck and due to this, the loans disbursed by banks became NPA.
What is NPA?
When a firm, company or individual does not repay the loan taken from the bank, then the stuck amount is called NPA i.e. non-performing asset. According to the Reserve Bank, if the installment of a loan given by a bank is not paid for 90 days, then that loan is declared NPA.