New Delhi: Pointing out the huge amount of bad loans in state-run banks during the United Progressive Alliance (UPA) government’s rule, Finance Minister Nirmala Sitharaman said that the Prime Minister and RBI chief duo of the time led public sector banks (PSBs) through the “worst phase”.

Taking a dig at the recent commentatorship of macroeconomics rivals former Prime Minister Manmohan Singh and former Reserve Bank of India (RBI) Governor Raghuram Rajan, Sitharaman said, “It was in Rajan’s time as Governor of the Reserve Bank that loans were given just based on phone calls from crony leaders and public sector banks in India till today are depending on the government’s equity infusion to get out of that mire.”

“I’m here today, giving him his due respect, but also placing the fact before you that Indian public sector banks did not have the worst phase than when the combination of Singh and Rajan, as Prime Minister and the Governor of Reserve Bank, had. At that time, none of us knew about it,” she added.

Asserting that the past blunders are the reason why banks are ailing today, the Finance Minister said, “I am grateful that Rajan did an asset quality review but I’m sorry, can all of us put together also think of asking what ails our banks today. Where has it been inherited from.”

Sitharaman’s comments came during a lecture at the Columbia University’s School of International and Public Affairs on Tuesday where she said that giving PSBs a “lifeline” is where her primary duty lies.

Admitting the frail condition of India’s economy, but blaming past governance for the fall, she said that “economists can take a view of what prevails today or prevailed years ago”, however, the condition of banks today has not come up overnight.

“I do respect Raghuram Rajan as a great scholar… but I will also want answers for the time when Rajan was in the Governor’s post speaking about the Indian banks, for which today to give a lifeline is the primary duty of the Finance Minister of India. And the lifeline-kind of an emergency has not come overnight,” she said.

“A rather too democratic leadership, which probably will have the approval of quite a lot of liberals, I’m afraid, left behind such a nasty stink of corruption, which we are cleaning up even today,” she added, calling for a need to have a more authoritative leader at the Centre.