Raghuram Rajan calls for change in appointment process in state banks

Mumbai: Reserve Bank of India Governor, Raghuram Rajan said that there was a need to change the management appointment process in public sector banks to make it more transparent.

The central bank is in talks with the government to improve governance in public sector banks, Rajan told a banking conference. He said problems that have emerged in recent bank scandals were due to outsourced project evaluation.

India's macroeconomic indicators are improving and inflation has been coming down consistent with the central bank's forecast, but Asia's third-largest economy needs investment growth to pick up. Rajan, however, said Friday's industrial output and inflation data suggested that recovery was ‘uneven’.

Output from mines, utilities and factories grew by a much slower-than-expected 0.5 per cent year-on-year, government data showed on Friday, down from June's revised 3.9 per cent rise. Retail inflation, which the RBI tracks for setting lending rates, edged down marginally to 7.8 per cent in August from 7.96 per cent a month earlier.