Gyan Sangam a failure, efforts by NDA govt to reform banks still-born: Raghuram Rajan

An outspoken critic of the NDA government, former RBI Governor Raghuram Rajan has launched an attack on the policies of the government highlighting the “still-born effort to reform public sector banks” and “the failure of the Gyan Sangam”, a conclave held on the banking sector in 2015.

These points have been brought forth by Rajan in a paper co-authored with former RBI Deputy Governor Viral Acharya, also seen as a government critic who had resigned from his post.

While giving a number of suggestions on banking reforms in the paper, including winding up of the Department of Financial Services in the Finance Ministry and reducing government stake below 50 per cent, Rajan said many of these have been discussed in the past which concern public sector banks and their governance.

“Is there any reason to be more confident that they will be implemented now,” Rajan asked.

“One salutary warning should be the NDA government’s still-born effort to reform public sector banks,” Rajan and Acharya said in the paper.

Following the PJ Nayak Committee report of 2014, the government brought a variety of key players together to the Gyan Sangam in early 2015, which recommended the setting up of a Bank Board Bureau to make public sector bank appointments, and the creation of strong empowered bank boards that would allow banks to have differentiated strategies.

Read More: https://www.bhaskarlive.in/gyan-sangam-a-failure-efforts-by-nda-govt-to-reform-banks-still-born-raghuram-rajan/