Date:09/01/2008 URL: http://www.thehindubusinessline.com/2008/01/09/stories/2008010950030800.htm

Back Classification as NPAs

The Finance Ministry has taken a view different from that of the Reserve Bank of India in the classification as NPA of loans to infrastructure projects. Even without going into the merits of the case, it would be best to leave these matters to the RBI.

Being the regulator, the central bank is expected to have better knowledge on these issues.

Second, by interfering in these matters, the Finance Ministry is certainly not helping the central bank to exercise effective supervision over the banking system. It is a pity that the autonomy of the bank is getting eroded in several spheres.

A. Chandramouliswaran e-mail