PNB fraud: What does it take to set up a high-performance RBI?

We should block the nominal growth of banking until we get to a minimum level of capabilities at the regulator

A certain minimal state capacity in bank regulation and supervision is required, and we are repeatedly discovering this is absent. Some people see this as a question of public versus private banking. Private banks in India also have major difficulties with non-performing assets (NPAs), which suggests that the common factor of banking regulation is the root cause. Our first port of call has got to be building a capable RBI. The one thing worse than a badly regulated public sector bank is a badly regulated private bank. We need to execute a slow decline in the size of the banking