India's banking crisis frightening, need to reduce government's equity share in PSBs: Nobel laureate Prof Banerjee

Nobel laureate Prof Abhijit Banerjee on Tuesday termed the banking crisis in India as frightening and stressed the need for reducing the government's equity share in public sector banks (PSBs) below 50 per cent.

"I think the banking crisis is frightening. We should worry about it a lot. We see a repeated pattern where -- first the bank is fine and suddenly there is a problem," said Prof Banerjee while addressing a press conference here.

"I have been saying this for a long time. I think we should be seriously thinking about reducing the equity share of the government in many public sector banks below 50 per cent so that CVC doesn't regulate them," he said and called for important and aggressive changes.

Commenting on the Aayushman Bharat health scheme of the Central government, Prof Banerjee: "I think it is much needed. It does something very important as it deals with the fact that healthcare expenses wipe families out. It does something very important there."

"I think it is something we need. We need to find ways so that families don't lose all their assets when somebody in the family gets sick. So, I think it serves a very important gap in our economic structure," he said.

Prof Banerjee, who met Prime Minister Narendra Modi earlier in the day, said that the PM started the meeting by cracking a joke about how the media is trying to "trap him to say anti-Modi things."

"He has been watching the TV. He has been watching you guys. He knows what you are trying to do," he said.

During his press conference, the noted economist said that he takes pride in the fact that he is happy to say 'I have no idea about many things.'

Earlier in the day, Prime Minister Modi met the Nobel laureate. Prof Banerjee said the PM's passion towards human empowerment is clearly visible and the country is proud of his achievements.

"Excellent meeting with Nobel laureate Abhijit Banerjee. His passion towards human empowerment is clearly visible. We had a healthy and extensive interaction on various subjects. India is proud of his accomplishments. Wishing him the very best for his future endeavours," the Prime Minister tweeted alongside a photo of the meeting.

Terming his meeting with Modi as a unique experience, Prof Banerjee said that the Prime Minister spoke on governance and bureaucracy.

"It was a privilege to have this meeting with the Prime Minister. The Prime Minister was kind enough to give me quite a lot of time and to talk a lot about his way of thinking about India, which was quite unique," he said.