The Reserve Bank of India’s Governor Urjit Patel has completed his first year in office, amid all banking blues. Patel took the charge of the apex body in midst of major monetary and banking reformations, the major being the demonetisation.
This year banking industry also struggled to get over the massive blow of Non-Performing Assets (NPAs).
Patel’s helm also includes the much speculated monetary policy of the RBI initiated in October 2016. The move attracted a lot of flak from several critics for appeasing the Centre.
Unlike his predecessor Raghuram Rajan, Patel has kept a low-profile so far and has delivered merely six speeches since the beginning of his tenure. However, Rajan has mentioned in his book of giving one speech every month on an average.
Patel has been vocal on several issues namely loan waivers, improved alignment of the rate on small savings schemes for policy transmission, and also on the capital restructuring of public sector banks.
Demonetisation, in particular, has garnered several criticisms from the common populace for the hardships that have faced due to the banning of high denomination notes. According to various experts, the decision was revolutionary and thus called for an extensive communication from the RBI.
Identification of the NPAs completed before Patel was designated but the task of finding a resolution to this challenge is still waiting to see the light of the day. The matter has been taking a lot more the usual time and bankers assume that it is soon going to hit the interest dues.
Going tough on the defaulters, RBI amended the Banking Regulation Act, empowering itself to direct banks to call for proceedings against defaulters depending on the Insolvency and Bankruptcy Code.
Some of the major resolutions initiated by Patel during the first year of his appointment include rectifying the accountability within banks to unveil
Some of the key decisions that Patel took during his one-year stint include improving accountability among banks, directing banks to disclose the identities of major defaulters pertaining to NPAs during FY16 and identifying 12 large corporate accounts for insolvency action.
Post this order, RBI drew a list of 12 major defaulters and asked the banks to proceed with insolvency against them. Similarly, the apex bank also revealed the second list released on August 29 that comprises of a minimum of 26 defaulters and banks have been directed to come up with a resolution by December 13.