Banks are commercial enterprises and should be allowed to operate accordingly. In principle, separating a commercial decision such as loan recovery from criminal proceedings against wilful defaulters is a step in the right direction
Pratik Datta writes: Policymakers need to be careful while extending the role of an independent central bank beyond its traditional and uncontested activities
Pratik Datta writes: The likely outcome of the latest ruling would be more litigation and delay at the admission stage, enhancing the risks of value destruction in the underlying distressed business
Pratik Datta writes: The central bank should issue regulatory instructions only after public consultations, clearly explain rationale for decisions, set up review mechanisms
🔴 Pratik Datta writes: It would compel states to either reform their financially distressed discoms or yield to privatisation efforts through insolvency resolution.
India’s tryst with Chinese FDI during Covid underlines importance of identifying national security threats from foreign investment. A dedicated law is needed to handle such issues.
Adopting the polycentricity test within constitutional jurisprudence would help sustain the legitimacy of judicial review while retaining the accountability of technocratic institutions such as the central bank.
If only asset reconstruction companies are allowed to directly participate in IBC resolutions by infusing equity, they could emerge as the most efficient vehicle for turning around distressed Indian businesses.
It may be prudent for the RBI to publish an empirical study on the impact of CEO tenure on bank performance before translating this proposal into an enforceable regulation.
India’s tryst with DRs began with the first scheme in 1993. Liberalisation gave a major boost to export-oriented services sector companies. Given their high growth potential, they could easily raise equity capital.
