New Delhi: Two days after saying public sector banks had ‘worst phase’ under former Prime Minister Manmohan Singh, former RBI governor Raghuram Rajan, Union Finance Minister Nirmala Sitharaman on Friday said she respects Rajan as he is a great scholar. Also Read - FM Sitharaman Asks G-20 to Take Steps to Revive Growth, Create Reforms

“I have a deep respect for Raghuram Rajan. He is a great scholar. He took over at a time when the Indian economy was buoyant,” she said during an interaction at Columbia University in New York on Friday. Also Read - 'Recalling When And What Went Wrong is Absolutely Necessary', Sitharaman Hits Back at Manmohan

On October 15, the finance minister had said that there was huge amount of bad loans in state-run banks during the United Progressive Alliance (UPA) government’s rule. Also Read - Public Sector Banks Had 'Worst Phase' Under Former PM Manmohan Singh, Raghuram Rajan: Nirmala Sitharaman

“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,” she had said.

In response to Sitharaman’s allegations, Manmohan Singh on Thursday accused the NDA government of ‘putting the blame on its rivals’. Singh’s statement came after Sitharaman, at an event at the Columbia University in New York accused the former Prime Minister of leaving behind ‘a nasty stink of corruption’ in the public banking sector, which suffered its ‘worst phase’ under him and Raghuram Rajan.

Sitharaman again on Friday hit back at the former PM, saying, “Recalling when and what went wrong during a certain period is absolutely necessary”.

“I respect Dr Manmohan Singh for telling me not to do the blame game. But recalling when and what went wrong during a certain period is absolutely necessary to put it in context, now that I’m being charged that there’s no narrative at all about the economy,” Sitharaman earlier in the day had said.