Mumbai: Former State Bank of India (SBI) chairman Arundhati Bhattacharya on Thursday said the government should have given more time to banks to adequately prepare for demonetisation, which had put tremendous strain on lenders.
Last year on 8 November, Prime Minister Narendra Modi had announced scrapping of Rs500 and Rs1,000 notes—a move aimed at cracking down on black money, corruption and fake currency.
“If we prepare extra for anything, then its fruit or result is better. Obviously, if there was more preparation (for demonetisation), then definitely it would have been less strenuous on us. If you want to move cash, there are rules, we need police, arrange the convoy, determine the route contiguity...it’s a very large logistic exercise,” said Bhattacharya said at an India Today event in Mumbai on Thursday.
According to Bhattacharya, more time was needed to assess whether demonetisation was a correct step or not. Spelling out some of the advantages of demonetisation, she said there has been a 40% increase in the number of taxpayers, lower reliance on high-value currency and greater digitisation.
“I don’t think people with black money will get (away) scot-free. Technology will help analyse lakhs of accounts. People with black money now know that they are under scanner,” she said.
On government’s bank recapitalisation plan announced Tuesday, Bhattacharya said if the Indian economy has to grow, capital has to be given to banks.
When asked whether she had received any phone call from any politician for giving loans to any company, Bhattacharya said in the current times, nobody calls and even if politicians call pitching for any company, there is no provision for banks to lend. “I can say with honesty that none of such calls came during my tenure. Today, the systems and processes in banks are such that one person alone cannot take a call (decision on lending). The decision has to be made through a committee,” Bhattacharya added.