Nobel laureate Abhijit Banerjee expresses worry about banking crisis; bats for aggressive changes

New Delhi: Nobel laureate Abhijit Banerjee on Tuesday flagged concerns about the banking crisis in India and called for aggressive changes to deal with the situation. There is a need to bring in important and aggressive changes to deal with the crisis, he said during interactions with media here. [caption id=“attachment_7496841” align=“alignleft” width=“380”] Abhijit Banerjee. Image courtesy - MIT[/caption] Banerjee said there is a need to bring down the stake of the government to below 50 percent in banks so that the decisions are taken without fear of Central Vigilance Commission (CVC). The banking system has been afflicted by the scourge of high NPAs for nearly five years now, which has led to net worth erosion and discovery of scams in the sector, with the Punjab and Maharashtra Cooperative Bank (PMC) being the new addition. Earlier in August, Central Vigilance Commission (CVC) had constituted Advisory Board for Banking Frauds (ABBF) headed by former Vigilance Commissioner T M Bhasin to examine bank fraud over Rs 50 crore and recommend action. On 30 August, Finance Minister Nirmala Sitharaman had said that the profitability of public sector banks was improving as the total gross non-performing assets of public sector banks came down to Rs 7.9 lakh crore at end-March 2019 from Rs 8.65 lakh crore at end-December 2018.