PNB fraud: It is a very poor reflection of the business ethics and values by which Indian business governs itself. It’s time for auditors to rise above where they are. As a banker, I am truly embarrassed with the state of Indian banking. It is really time for us to do the right things for having a huge fiduciary responsibility when we are dealing with other people’s money.

Fixing systemic glitches: Deep down, it is about values; it is about culture; it is about rules, and we hope at some point of time we really focus on the quality of governance of companies and in that context of broader India. Governance ultimately is in the hearts of people but if you put reasonable rules and processes and if they are followed in letter and spirit, you can avoid some of this.

Nirav Modi case: I cannot talk about this specific case because I am not close enough. But I can tell you how we look at this. When we as a bank look at discounting under third party banks’ LC or guarantee or LoU, our internal process is that the credit of the underlying borrower must go through our credit approval process. We follow that religiously across all such exposures.

PSU Banks from here: We have a very big issue - a long-term systemic issue. We may have short term fixes, but in the long term, this systemic issue has to be addressed. There are two ways to do it - there should be a few PSU banks. For the rest, we have to find an answer and that should be sooner rather than later.

Public interest argument: We nationalised banks in 1969. The public interest argument was, private banks are giving money only to big business as a result of which we will create stateowned banking that will give money to the broader society. Forty-nine years later, the bulk of the lending of public sector banks is to big business and that is what has gone down the drain. Therefore, if I ask a question, what public interest have we served over 49 years? And who is accountable for our money as citizens of India?

Solution: This is a problem created over several years, cobwebs have settled, everything was justified on the grounds of public interest. But under that garb, we have actually given money to big business. It’s a tragedy. We are at a very important crossroads of India’s financial destiny. Contingent equity risk of the Indian tax payer is the entire deposit base; every depositor expects the state to pay. FRDI bill or no bill, the state has to pay.

Economy: I am positive about the economy. I am seeing the economy turn around. Micro India is looking better and we are clearly seeing macro getting tougher than before. If you take the first these years from 2014-17, you had a positive macro and a challenging micro. We now have a positive micro and a more challenging macro.

Cautious about the equity markets: Unless US interest rates move up a lot, I would be surprised if the 10-year went above 8%. Indian equity markets may see a little more volatility with potential corrections, which at some point of time will get healthier. On a medium-term basis, I am still quite comfortable with Indian equities, subject to short-term volatility and corrections.

Bond yields: Unless US interest rates move up a lot, I would be surprised if the 10-year went above 8%. Indian equity markets may see a little more volatility with potential corrections, which at some point of time will get healthier.

Next level of economic growth: My current view is haircuts on an average should be around 60- 65% of the principal value. There are exceptions like steel where hair-cuts will be smaller like 30%. I just hope there are no legal hurdles to the NCLT process. Roads, construction, auto, metals and commodities, the whole digital economy, and the consumer are still holding forth.

Investing in equities: I will put money in financial services. There is enormous growth. If I take a 5-10 year view, as long as you manage your risks and as long as you are focused on doing the right things, it will work. We need to answer three questions in our financial services governance, ownership and risk management. These three are fundamental to how the financial sector needs to be envisioned for the future.