(Full Text) Raghuram Rajan says he informed PMO on high profile NPA fraud cases, no action was taken


Former Reserve Bank of India Governor Raghuram Rajan told a government panel that he had sent a list of high profile NPA fraud cases to Prime Minister’s Office but he was not aware of any progress on his report.

In a note to Estimates Committee led by Murli Manohar Joshi, Rajan said that the RBI had set up a fraud monitoring cell when he was the governor to coordinate the early reporting of NPA fraud cases to the investigative agencies.

He told the panel, “The investigative agencies blame the banks for labeling frauds much after the fraud has actually taken place, the bankers are slow because they know that once they call a transaction a fraud, they will be subject to harassment by the investigative agencies, without substantial progress in catching the crooks. The RBI set up a fraud monitoring cell when I was Governor to coordinate the early reporting of fraud cases to the investigative agencies. I also sent a list of high profile cases to the PMO urging that we coordinate action to bring at least one or two to book. I am not aware of progress on this front. This is a matter that should be addressed with urgency.”

The parliamentary panel had sought his expert advice and “expert view” on the NPA crisis. According to estimates, Indian banks are currently grappling with bad loans amounting to more than Rs 10 lakh crore.

Rajan’s note to the committee assumes significance in light of NITI Aayog Vice Chairman Rajiv Kumar’s astonishing claims last week that the former RBI governor was responsible for India’s current economic mess.

You can read the full text of Rajan’s note to Parliamentary Committee on NPAs below.


Parliamentary Note by Rifat Jawaid on Scribd