India’s central bank is considering a proposal that would limit the number of participants in a single lenders’ consortium, in a bid to encourage banks to carry out better independent credit checks and do more to chase rogue borrowers.
Reserve Bank of India Deputy Governor R. Gandhi told a conference on Tuesday that banks with small exposures assume less responsibility when loans sour – a major problem for India, as it seeks to tackle $50 billion of bad debt that’s slowing credit growth and hampering a broader economic recovery.
Banks, he said, need to act urgently to reduce stressed assets on their balance sheets.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.