A ritualistic risk dance begins as the political stakes start to rise
- RBI’s belated tightening of personal-loan rules suggests that regulatory checks remain tied to the Indian electoral calendar. Authorities seem to be comfortable with excessive speculation during normal times but acquire jitters just before polls.
There are no prizes for guessing when it’s election time in India; the high-decibel festive atmosphere accompanying pre-election campaigning makes sure that polls never go unnoticed. But there is another pre-election event that is also a clear giveaway: a sudden tightening of rules in the financial markets. Nobody wants a scam or payments crisis before key elections, especially one that may spring up in capital markets and traverse the financial system.