RBI closes in on ‘endgame’ in bank clean-up
Governor Urjit Patel says central bank’s new powers have allowed it to overcome “severe” moral hazard problems
The Reserve Bank of India (RBI) is getting closer to the “endgame” in its efforts to clean up the country’s banking sector, according to RBI governor Urjit Patel.
Parliament passed a new bankruptcy code in 2016 that paved the way for dealing with stressed assets, but it was undermined by what Patel called “severe” agency and moral hazard problems, as government-owned banks were not keen to tackle the problem on their own. Dealing with the assets in many cases necessitated the liquidation of
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