Raghuram Rajan blames this for bad loans crisis in banks

In his reply to 30-member Lok Sabha Committee on Estimates, headed by BJP veteran Murli Manohar Joshi, former RBI Governor Raghuram Rajan is said to have blamed the 'over optimism of bankers' and 'growth slowdown' for soaring non-performing assets (NPAs) in the country.
 
The parliamentary committee looking into the issue of mounting NPAs had asked Raghuram Rajan to appear before it. The former RBI Governor was reportedly invited after former CEA Arvind Subramanian praised him before the panel for identifying the NPA crisis. 
 
According to CNBC-TV18, Raghuram Rajan told the House panel that banks failed to do 'due diligence' on large loans and relied on promoters. He added that post-2008 slowdown made growth projections of banks unrealistic.

Holding banks' management accountable, Rajan reportedly said that high NPAs were due to bankers' exuberance and incompetence and corruption. He also blamed lack of monitoring and extending loans to companies which had history of defaults. 
 
The former RBI Governor reportedly blamed the policy paralysis in the UPA government for delaying the ongoing projects.
 
He is learnt to have stated that banks extended more loans to prevent 'zombie' loans from turning non-performing assets. Further, he reportedly said that the laws didn't allow banks to seize property.
 
Notably, bad loans touched Rs 8.99 lakh crore as of December 31, 2017, with PSBs accounting for over 86 per cent of this amount.

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Raghuram Rajan, who was RBI governor till September 2016, is currently the Katherine Dusak Miller Distinguished Service Professor of Finance at Chicago Booth School of Business.