Banking on banks
Indeed, there is scope for vast improvement on several fronts, as Rajan and Acharya see it, from the performance of state-run banks and the way they handle dud loans to the risk- management systems they use and the uniformity of their structures
Sometimes, it takes a crisis to do what’s needed and India’s current turmoil offers one such opportunity. Former Reserve Bank of India governor Raghuram Rajan and former deputy governor Viral Acharya, in a co-authored paper, have pointed out how the enormous strain on India’s fiscal resources makes it imperative that our banking system is put through the wringer of reforms. Without these, it will act as a drag on growth rather than an engine.