RBI's priority is cleaning up banks, says Viral Acharya

RBI deputy governor said that demonetisation had led to a change in the way Indians saved

The cleaning up of banks’ books was the Reserve Bank of India’s (RBI’s)  priority, Viral Acharya, the bank’s deputy governor, said on Saturday.

Asked if cleaning up non-performing assets of banks took precedence over cutting interest rates for the RBI, Acharya replied, “That is our number one priority.” He was speaking on the sidelines of the Delhi Economics Conclave. 

According to the minutes of June meeting of the Monetary Policy Committee, Acharya maintained tolerance for a slightly higher rate of interest was justified to ensure that banks “do not find relatively low the hurdle rate for evergreening (perennial extension) of bad loans”.

“What