Mumbai, Maharashtra: Moves to dilute a new bankruptcy law caused disagreements between Prime Minister Narendra Modi’s government and the central bank, according to former Reserve Bank of India Governor Urjit Patel.
The rift centered around a February 2018 circular issued by the RBI, which forced banks to immediately classify borrowers as defaulters when they delayed repayments, and which barred defaulting company founders from trying to buy back their firms during insolvency auctions. In a book released Friday, Patel — who headed the RBI between September 2016 and his unexpected resignation in December 2018 — said the government seemed to lose enthusiasm for the legislation in the middle of the year he left the central bank.
News Source: The Print
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