The court’s ruling is a blow to India’s banking regulator which had, over the last four years, forced domestic lenders to clean up their balance sheets, by first forcing them to recognise the true extent of their bad loans and making full provisions for them. Against their will, the RBI directed them to take over 40 large bad loan cases to the NCLT. AdvertisingThe latest ruling courts the danger of reversing all these gains. But it is worth recalling that the fire was first lit by the government which objected to this circular, encouraging infrastructure firms to take on the regulator. The Supreme Court ruling should not lead to a further diminishing of the stature of the RBI.

Source: Indian Express April 02, 2019 18:56 UTC