Why regulatory forbearance must end
RBI must clamp down on the routine restructuring of stressed assets
If kicking the can down the road were a competitive sport, India’s state-owned banks would be Olympic champions. After failing to check the rising proportion of bad assets on their books, chiefs of government-owned banks are now lobbying to extend the window of regulatory forbearance that allows them to maintain low provisions against impaired assets. Several indebted companies have joined the chorus to extend the window of regulatory forbearance, and the finance ministry seems to be lending them a sympathetic ear, according to news reports.
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