Must commend RBI for defusing NBFC crisis: Former governor Subbarao

The banks don't provide for their bad debts adequately, and take four to five years to provide for them, which creates problems.

The Reserve Bank of India (RBI) has done a commendable job in preventing a crisis in the non-banking financial companies (NBFC) sector, and should be given more credit for protecting the financial system, former governor Duvvuri Subbarao said on Tuesday. 

“I believe the RBI under governor (Urjit) Patel first and then under (Shaktikanta) Das acted with extreme alacrity and haste to defuse the NBFC bubble and then to prevent the bubble from snowballing into a crisis,” said Subbarao.  

He was speaking as part of a panel at the launch of a book titled Pandemonium: The Great Indian Banking Tragedy authored by Tamal