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RBI-govt spat latest flashpoint as 2019 elections near, easy money era ends

Italy, India have the worst bad loan ratios among the top 10 economies

India
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Source: IMF's Financial Soundness Indicators *RBI's Financial Stability Report

Anirban Nag | Bloomberg
India is the latest country to see age-old tensions between governments and central banks flare up as the era of easy money draws to a close.

Prime Minister Narendra Modi’s government sent the central bank letters that cited a never-used power to overrule the Reserve Bank of India in a bid to push through measures that would unleash spending ahead of an election, Bloomberg reported Wednesday. That triggered a feisty speech from a central bank deputy in defense of independence, which brought the spat into the open.

As the rift looked set to deepen Wednesday, the government appeared to ease

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