Improving credit growth of public sector banks good for economy: Rajan
On the Kingfisher Airlines' default, Rajan said it is important to learn from mistakes and move on.
Reserve Bank of India (RBI) Governor Raghuram Rajan said that banks have room for credit growth and the central bank looks forward to improving the credit growth of public sector banks. He was speaking to Zee Business in an interview.
"Banks need to see how they can acquire new customers onboard and how they can make income out of it. Banks need to look at credit growth."
"There is credit growth in private sector banks but this is not happening in public sector banks. The government and the central bank have infused money into public sector banks so they should look at increasing the credit growth so it will be good for the state of the economy," Rajan has said.
On Vijay Mallya and Kingfisher Airlines default
On the Kingfisher Airlines case, Rajan said mistakes have happened and we should learn lessons from them and move ahead.
"Mistakes have happened and we have to rectify them and also we have to look ahead. What lessons we should learn from the past? One, credit evaluation should be proper. Second, there should be more equity into the project. Third, the equity should be genuine and not borrowed one. All these lessons we need to take and have to move ahead."
Commenting on the central banks' stance in future rate cuts this fiscal, Rajan said that the apex bank is 'accommodative' and it will cut rates if there was a scope for one.
The RBI Governor in a monetary policy meet on April 5 cut key lending rates by 25 basis points. While the industry welcomed the move, many felt that 25 basis points after a six-month status quo wasn't enough.
Watch the full interview here: