How the stressed asset problem snowballed into a tussle between RBI, govt

An exclusive excerpt from A K Bhattacharya's 'The Rise of Goliath'

Even as the banking sector was trying to come to terms with the various schemes introduced by the RBI to force them to recognize bad loans before they became a bigger problem, the government on its own introduced a set of measures for ensuring early Recognition, Recapitalization of public-sector banks, Resolution of bad assets and Reforms of banks (the four Rs). The implementation of each of these Rs posed new challenges for the financial sector and saw different types of disruption in the economy.

With respect to the first R — recognition of bad loans — a lot of action had