Arvind Subramanian criticises RBI over regulatory failures, says central financial institution’s experiences by no means talked about potential IL&FS disaster

New Delhi: Former CEA Arvind Subramanian on Friday criticised the RBI for its regulatory failures, saying its Financial Stability Reports by no means talked about concerning the potential liquidity disaster within the IL&FS, one of many largest NBFC within the nation.

Subramanian additional stated that India’s greatest problem in the meanwhile is twin stability sheet downside.

“While RBI is one of the best institution, we have, we had some massive failures like Infrastructure Leasing & Financial Services (IL&FS). If I am not wrong, if you go back, and see Financial Stability Reports of last 4-5 years, I don’t think IL&FS was specifically mentioned as a possible problem, something to be watched out for,” he stated at an occasion.

Recently, Subramanian was within the information for claiming that India has been overestimating its GDP by 2.5 per cent between 2011-12 and 2016-17.

File picture of former CEA Arvind Subramanian. Reuters.

Subramanian, a visiting lecturer in Public Policy on the Harvard University, was the CEA in finance ministry from October 2014 to June 2018.

The cash-strapped IL&FS group is sitting on a debt of about Rs 94,000 crore.

Several group corporations have defaulted on the cost of pursuits on loans.

The issues on the diversified IL&FS group, that has been getting into for a few years, got here to mild when it defaulted on debt repayments final 12 months.

The IL&FS disaster had contagious impact on the NBFC (Non-banking monetary firm) sector as liquidity began drying up for them.

Finance Minister Nirmala Sitharaman within the Budget proposed steps to assist the crisis-ridden sector.

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