Nobel laureate Abhijit Banerjee suggests proactive approach to prevent banking crisis

Speaking to the media here at a press conference, Banerjee expressed concern over the banking crisis saying it was frightening and called for early detection of an approaching disaster.

"We should worry about the current state of banks...one day the bank is fine and the next day it is in crisis...We should be able to stop this crisis much before it happens..we should be more vigilant," the acclaimed economist said.

Banerjee also pointed out the need for reducing government stake in Public Sector Banks in order to relieve the banks of the fear of vigilance investigations.

He said banks were afraid to lend for the fear of being investigated by the Central Vigilance Commission(CVC) and added "Reducing government equity in public sector banks below 51 per cent will take them out of the CVC's purview."

However, Banerjee said that he will not make any controversial statement as he has been cautioned by the PM that the media was trapping him into making anti-Modi statements.

"I had a cordial and good meeting. PM Modi started by cracking a joke on how media is trying to trap me to say anti-Modi things... He's been watching the TV and he's been watching you guys. And he knows what you are trying to do," Banerjee told the media.

Notably, Abhijit Banerjee has been a critic of the economic policies of the Modi government though he in recent interviews said his experience of working with the Gujarat government in the past under Modi was good.

After he won the Nobel, Banerjee had criticised the present dispensation and said the Indian economy is on shaky ground.