Bengaluru: Former RBI Governor Urjit Patel has written a book titled ‘Overdraft – Saving The Indian Saver’. 

The book is scheduled to release on July 24. 

He blames the UPA for the non-performing assets crisis at public sector banks. He adds that they failed to create risk controls or ensuring adequate management. 

He notes in his book: “The government is responsible for ensuring adequate capital for banks that are under its ambit on a durable/sustainable basis. The dominant owner pre-2014 didn’t question risk controls in government banks even as it received significant dividends. A number of government banks did not have senior management in place, and governance suffered”.

Patel also questions the RBI’s failure in identifying bad loans before 2014. “The RBI failed to challenge assumptions through, for example, more rigorous stress-test scenarios at the bank level, as well as sensitivity analysis on (demand) assumptions, and sector (policy) risks.” 

The book reads, “The regulator fell short on several counts in the period leading up to 2014. It failed to challenge assumptions through, for example, more rigorous stress-test scenarios at bank level, as well as sensitivity analysis on (demand) assumptions, and sector (policy) risks. The scale of exposure – or risk build-up – was not appreciated enough and contested by the regulator to effectively slow down or tighten the lending norms, say, by increasing sector risk weights to ensure protection by increasing capital requirements.”

He writes, “Had the central bank identified the build-up of risks, it could have tightened lending norms by, for instance, increasing risk weights allotted to various sectors.”

Appointed in the year 2016, Urjit Patel resigned in 2018, citing personal reasons. Presently, he is Chairman of the National Institute of Public Finance and Policy (NIPFP).