RBI did not see IL&FS as a possible problem: Subramanian

New Delhi: Former CEA Arvind Subramanian criticised the RBI for its regulatory failures, saying its Financial Stability Reports never mentioned about the possible liquidity crisis in the IL&FS, one of the largest NBFC in the country.

Subramanian further said India’s biggest challenge at the moment is twin balance sheet problem. “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 four to five years, I don’t think IL&FS was specifically mentioned as a possible problem, something to be watched out for,” he said at an event here.

Recently, he claimed that India has been overestimating its GDP by 2.5 per cent between 2011-12 and 2016-17.

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

Agency