RBI needs to work with govt to take action against PSBs, says Rangarajan

RBI's action in banning of Letters of Undertaking (LoUs) could be reviewed later, says former RBI head C Rangarajan

C Rangarajan, former head of the country’s Reserve bank (RBI) says the regulator does have formal supervisory powers over government-owned lenders but also needs to work with the state in taking needed action.

He was speaking a couple of days after Reserve Bank governor Urjit Patel had said the central bank did not have adequate leeway in this regard.
 

“The issues have been raised at various levels. How much control the Reserve Bank has over public sector banks (PSBs) is an issue. In terms of (formal) supervision, it has powers,” the former head of the prime minister’s economic advisory council told