Overdraft – Urjit Patel on Saving Our Savings

 

HarperCollins

is proud to announce a topical and hard-hitting book by the highly respected macroeconomist and former RBI Governor

Urjit Patel

OVERDRAFT

Saving the Indian Saver

Releasing on 24^th July 2020

Urjit Patel would have cleared the NPA mess if he hadn’t been prevented…

New Delhi, 7 July 2020: Urjit Patel was appointed RBI governor during a turbulent and tense period in 2016, when the problem of unsustainable bad debts or NPAs in the Indian banking sector was at its peak. He worked out the‘9R’ strategy which would have saved our savings, rescued our banks and protected them from unscrupulous racketeers. In Overdraft, he explains the problem and how it blew up; and how he would have resolved it if he had not been prevented.

 

ABOUT THE BOOK

All of us love to spend. But before we can do that, we have to have earned or saved some money. Only sovereigns don’t have to: they can print money, or borrow; in our country, where they own banks, they can use our deposits to lend and splurge for goals that may not always be economic in nature. Many rulers have succumbed to the temptation, with dire results – inflation, debased currency, payments crises, bankrupt banks, economic stagnation, loss of public confidence. After centuries of ruinous experiences, some governments learnt, others haven’t, to control themselves, create self-governing Central banks and let them manage money and regulate banks.

Snippet from the book: In playwriting there is a concept known as ‘Chekhov’s gun’: if there is a rifle hanging above the mantelpiece in Act One, it is going to be fired at someone by the end of Act Five. In the regulatory, enforcement, and legal landscape around loan recoveries in India, the unused rifle usually disappears by Act Three, hence it is not credible since all stakeholders know about the preordained vanishing act. At the heart of the subject is the increasing risk, in effect, due to the failure, over decades, to arrest a creeping banking sector-fiscalization.

Sometime in 2015, news of unsustainable bad debts (non-performing assets or NPAs) in the Indian banking sector started to first trickle out and then became a flood. In the forefront were some of India’s largest government banks, and a series of tycoons who were running their empires on unpaid debts. The banks’ problems landed on the table of Urjit Patel when he became Governor of Reserve Bank of India in September 2016. Based on thirty years of macroeconomic experience, he worked out the ‘9R’ strategy which would save our savings, rescue our banks, and protect them from unscrupulous racketeers. In this book, he explains the problem and how it blew up; and how he would have resolved it if he had not been prevented.

‘We are proud to publish Dr Urjit Patel’s in-depth book on the banking crisis and how it can be solved. Dr Patel is one of the country’s foremost macroeconomists and as Governor of the RBI was deeply engaged in implementing the clean-up of NPAs. His knowledge and expertise make for an absorbing book on a crisis that affects us all.’

– Krishan Chopra, Publisher

 

Snippet from the 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. Several government banks did not have senior management in place, and governance suffered. This is a perennial shortcoming on account of bureaucratic inertia and political meddling…

 

ABOUT THE AUTHOR

Urjit R. Patel served as the twenty-fourth Governor of the Reserve Bank of India. During his tenure he was a director of the Bank for International Settlements, and a member of the Advisory Board of the Financial Stability Institute. Before his governorship he was the Deputy Governor in charge of monetary policy; he chaired a committee on strengthening monetary policy.  From 2013 to 2018 he was Principal/Deputy in the G-20 and BRICS Finance Ministers and Central Bank Governors groups. Earlier he worked with Reliance Industries and Infrastructure Development Finance Company. He began his career as an economist with the International Monetary Fund.  He has been a consultant to the Indian Ministry of Finance, and a Non-resident Senior Fellow of Brookings Institution, Washington, D.C.  Last year he was awarded the Wilbur Cross Medal by Yale University. He is Honorary Fellow, Linacre College, Oxford.

For more information contact:

Aman Arora at aman.arora@harpercollins.co.in