Andy Mukherjee, Columnist

India's Clouseau Bankers Deserve a Bigger Stick

The supervisor needs more powers to discipline state-owned lenders.

March 15, 2018 at 6:49 AM UTC

Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. Previously, he worked for Reuters, the Straits Times and Bloomberg News.

Peter Sellers In "The Return Of The Pink Panther" 1975 — Photographer: Keystone-France/Gamma-Keystone via Getty Images

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It wouldn't be an exaggeration to think of India's 21 state-run lenders as one gigantic bad bank that's financially fragile, operationally weak, and forever in need of relief and rescue.

But in trying to blame the banking supervisor for the latest manifestation of the lenders' Inspector Clouseau-like ineptitude -- a $2 billion scam at the second-largest -- Finance Minister Arun Jaitley has unwittingly sparked a debate. Now that the supervisor-in-chief, Reserve Bank of India Governor Urjit Patel, has responded with a hard-hitting critique of the government, the mess may get fixed. Getting it done by 2019, the 50th anniversary of India's original sin of bank nationalization, would have symbolic as well as practical utility.