Mega bank mergers and the future of reforms

Abstract

For a while it seemed the Modi government had a reforms plan for the banking system. But now it is left with mere optics. When the Modi government took charge in 2014, it was set to prove its admirers right, and the sceptics wrong, on banking reforms. The then Governor of the Reserve Bank of India (RBI), Raghuram Rajan, was halfway through his tenure and had independently started the clean up of the banking system by taking action wherever the remit of the RBI worked. When it came to matters beyond the RBI’s powers, Rajan worked with the government. The clean-up of balance sheets; recognition of non-performing assets; taking pro-active steps in default cases and strategic structuring of stressed assets were some of his initiatives. Rajan had also taken the initiative to set up the PJ Nayak Committee, which looked into the governance of public sector banks. The committee had drawn up a road map that was contemporary and relevant. The report was submitted just after the new government came in. Read more at: https://www.livemint.com/Industry/7cgGhaQbYgzOzJ18uHDPWI/Mega-bank-mergers-and-the-future-of-reforms.html