PNB scam and NPA crisis: How to build capacity at Reserve Bank of India

The PNB crisis, and the vastly larger NPA crisis, have demonstrated that the RBI's oversight of banks is flawed

With the non-performing assets (NPA) crisis and the Punjab National Bank (PNB) crisis, all eyes are on Reserve Bank of India (RBI) reform. We should not engage in a witch-hunt and we should not fight the last war. The place to focus on is the rules of the game that make the RBI. These rules need to be modified so as to create the institutionalised application of mind. State capacity at the RBI will come from focus and from good governance procedures.
 

Banks make a promise to depositors that money will be returned with interest. The purpose of micro-prudential regulation