At issue is what to do with USD 133 billion in stressed assets accumulated by banks after years of reckless lending, a problem that has bedevilled regulators and stalled loans that India needs to revive private investment.
Banks in India have record stressed loans of USD 133 billion, or 12.34 percent of their total loans, as of last September, and economists say dealing with them has become imperative given the load is constraining lending and delaying much needed private investment.
In his maiden speech after becoming RBI Deputy Governor, Viral Acharya yesterday said banks might have to take larger hair cuts than what they ask for.
After an assessment of the money required for handling various stress scenarios in the banking system and the financial markets, the RBI transfers its surplus or the dividend, to the government. Once it transfers the money, it is for the government to use is the way it wants, the newly appointed joined deputy governor said.
Newspapers and markets were forecasting the Reserve Bank of India would cut its key rate by a quarter of a percentage point. But the RBI held rates and moved to a "neutral" policy stance, signalling an end to India's longest monetary easing cycle since the 2008-09 global financial crisis.
According to the former finance minister, "someone in the Reserve Bank of India" submitted a letter to the Centre opposing a proposal to devalue high-value currency notes on the day that Rajan resigned.
The Reserve Bank of India is unsure of a bad bank success to resolve bad loans but is open to setting it up to experiment all solutions.
Policymaking is like going 60 miles per hour with the rain pattering on your windshield with no idea what is in front of you, according to former governor of the Reserve Bank of India Raghuram Rajan.
Banks and stressed companies get yet another variant - Public Sector Asset Rehabilitation Agency (PARA) - to resolve bad loan problems. But will it be successful?
The Reserve Bank of India's failure to promptly infuse cash in the aftermath of the demonetisation decision may boil down to one key issue.
Former RBI Governor Raghuram Rajan had categorically rejected the idea of demonetisation, he claimed, adding that NDA government "must have consulted some RSS pracharak" before taking the decision.
"Evidences do not point out that there was wholesale use of Jan Dhan accounts for money laundering purposes. Nearly 25 per cent of the JanDhan accounts were having zero balances and in the remaining, the average balance was Rs 27,000," he said at the Kolkata Literary Meet here.
The design of new banknotes of Rs 500 and Rs 2000 denominations was approved at the May 19, 2016 meeting of the Central Board of RBI, an RTI query has revealed.
Speaking to CNBC former RBI Governor Raghuram Rajan raised concern over the protectionist policies proposed by US President-elect Donald Trump and said there is a significant risk of a trade war between US and China.
In an interview to FIrstpost, Chaudhuri said that the central bank should have been more transparent about the whole process of demonetisation instead of "running and hiding".
India, one of the world's fastest growing economies, is at an "exciting but challenging time" and has massive potential to become an "economic powerhouse", RBI's newly-appointed Deputy Governor and noted economist Viral Acharya has said here.
Raghuram Rajan, former Reserve Bank of India governor and former IMF chief economist, speaks with CNBC's Steve Liesman at the American Economic Association Conference about the state of the global economy and his outlook going forward.
Addressing the media on the last day of depositing the invalid notes in banks, Chidambaram also demanded that the agenda and minutes of the crucial RBI Board meeting along with the Cabinet Note of demonetisation be made public.
So Moneycontrol has put together a list of 13 â€˜known unknowns‘ as Donald Rumsfeld, the then US Secretary of State for Defence said in 2002. These are risks the market knows about, but cannot say how they will pay out.
Former Reserve Bank governor Raghuram Rajan, in a blog in Livemint, says that alongwith strong government, the rule of law and democratic accountability, free markets complete the main pillars of a liberal democracy.
2016 will be remembered as the year of newsmakers who managed to put India on the map. While Prime Minister Narendra Modi took top honours by his overnight decision to ban legal tender of popular banknotes, Raghuram Rajan kept us enthralled with his larger-than-life image
Was RBI governor Urjit Patel right to hold back on a rate cut last week? If demonetisation uncertainty prevented him from cutting rates earlier, the US Fed‘s rate increase will likely add to his hesitation.
Former RBI Governor Raghuram Rajan today delivered a lecture on the state of global economy but reportedly made no mention of the prevailing economic scenario in India or the controversial demonetisation drive.
Most economists believe the RBI will cut the repo rate by 25 basis points (bps) to a six-year low of 6.00 percent at a policy review, and follow that with at least one easing next year after the scrapping of high-value bank notes severely curbed consumer demand.
Economic Affairs Secretary Shaktikanta Das, who has been holding fort since the November 8 decision to ban old 500 and 1000 rupee notes by almost daily announcing measures taken by the government to ease the cash crunch, said more important than who addresses is the issue of communicating and giving information.