India’s Sisyphean system for bankruptcy is in the sights of the country’s central bank governor, who says reform is desperately needed to protect state-owned banks.
“We want to bring pure capitalism back, which is a contract is a contract,” Raghuram Rajan, governor of the Reserve Bank of India (RBI), told CNBC in an exclusive interview. “That’s what we’re in the process of doing by giving the banks a few more powers and asking them to enforce their contracts.”
Without that, companies don’t fear resolution and instead put the squeeze on banks to bail them out, he said.
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