The Central government should also take note of some forward-looking statements that Mr.Rajan has made on the governance of banks. Among his suggestions to avert a recurrence of the current mess are, professionalising bank boards with appointments done by an independent Banks Board Bureau; inducting talent from outside banks to make up for the deficit within; revising compensation structures to attract the best talent; and ensuring that banks are not left without a leader at the top. It is a comment on the state of our polity that despite the important issues that Mr.Rajan raised, political parties have chosen to pick only the points that are convenient to them-about the period when these bad loans were made and the purported inaction over a list of high-profile fraud cases highlighted by him. Mr.Rajan advice on loan waivers has been made by him and others in the past. But the political class has chosen to turn a deaf ear to this advice, vitiating the credit culture and creating a moral hazard where farmer-borrowers assume that their loans will invariably be waived off. The former RBI Governor has strongly defended the RBI against criticism, often unfair, over its policies on NPA recognition and resolution. He rightly termed as ludicrount the allegations that the economy slowed down because of the RBI. Recognition is the first step in a clean-up, and unless banks are cleaned of their non-performing loans, they cannot make fresh loans his note to Parliaments Estimates Committee on bank non-performing assets , Mr.Rajan has flagged three major sources of potential trouble: Mudra credit, which is basically small loans granted to micro and small enterprises; lending to farmers through Kisan Credit Cards; and contingent liabilities under the Credit Guarantee Scheme for MSMEs, run by the Small Industries Development Bank of India. given below each of them. Certain words/phrases/sentences have been printed in bold to help you locate them while answering some of the questions.