Patel Rap

I have chosen to speak today to convey that we at the Reserve Bank of India also feel the anger, hurt and pain at the banking sector frauds and irregularities. In plain simple English, these practices amount to a looting of our country’s future by some in the business community, in cahoots with some lenders. As safeguards of your deposits at banks, and starting with the Asset Quality Review of banks announced by the Reserve Bank in 2015 – since ably conducted by our supervisory teams and as acknowledged objectively by experts of reputed multilateral agencies, we are doing all we can to break this unholy nexus.

I see what we have undertaken for cleaning up the credit culture of the country – in particular, the comprehensive regulatory overhaul announced by the Reserve Bank on February 12th for prompt recognition and resolution of NPAs at banks – as the Mandara mount or the churning rod in the Amrit Manthan or the Samudra Manthan of the modern day Indian economy. Until the churn is complete and the nectar of stability safely secured for the country’s future, someone must consume the poison that emanates along the way. If we need to face the brickbats and be the Neelakantha consuming this poison, we will do so as our duty; we will persist with our endeavours and get better with each trial and tribulation along the way.

I do wish more promoters and banks, individually – or collectively through their industry bodies, would reconsider being on the side of Devas rather than Asuras in this Amrit Manthan.

said Dr. Urjit Patel, RBI Governor

2 Replies to “Patel Rap”

  1. Mr Patel’s passionate speech as RBI Guv (which regulator does not want more power :)) is possibly moving. But as the wise say, judge men always by what people do, never by what they say.

    Mr Patel is a good case study. Let’s see what he did in contrast to what he said.

    He was a Director in Gujarat State Petroleum Corporation (FY 06 – FY 13). Under his watch, GSPC was granted loans by PSBs running into more than Rs 20,000 crore, to extract gas in KG Basin. CAG questioned many transactions arising from this loan as suspect. Ultimately, much as suspected, zero, yes zero gas was extracted out of Rs 400,00 crore promise by Mr Modi*. GSPC went from a profit making PSU to a loss making one one burdened with debt. It was later merged with ONGC with their shareholders (which included GoI, and hence the citizens) left paying for it.

    Check them out in the annual reports here and others
    ( http://bit.ly/2zIaygY ), especially the name of the Chairman of the Audit Committee on page 12. Not to mention the Chiarman of GSPC at the same time.

    All I can say is fool me once, shame on you, fool me twice shame on me.

    * Source: Reported speech at Vibrant Gujarat Summit

  2. Lo and behold! like everything in our country’s economy has to be connected to the Vedas and Puranas!! How great it would have been, if each of our constitutional authorities had focused on the core objective of their existence? RBI to focus on Fair Banking Practices, EC to focus on Free and FAIR (with transparent tools proved to be 100% perfect) elections etc.
    If RBI is cleaning up some of the past mess currently (as it has been doing over the past years in cyclical certainty, providing/writing off loans in one pretext or the other) – which may include a number of political connected loans given in the previous regime (of UPA), can it do just one more favour? Can it please publish all the big loans of hundreds and thousands of crores that are being taken CURRENTLY by the current day ministers, MPs, MLAs, other elected politicians of ALL parties, and by the top 50 businessmen in the country (in terms of their Networth) from our banking system, and the current value of security that is available against such loans?
    This will prove beyond doubt, the RBI noble deed of cleaning up our banking system, and not cleaning up the depositors money in our banking system.
    And if RBI wants to wash its hands off its supervisory responsibility, let our govt give them the right ‘soap’ to do so.

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