Does the ordinance solve the banking crisis?

The biggest threat in banking regulation is the pressure within the RBI to hide bad news at banks

Bureaucracies are prone to failure. Clarity of purpose and accountability are essential for obtaining performance. The decisions that are required when dealing with a bad loan require energy and profit-motivated thinking. It is hard to do this in PSU banks, and it is harder to do this at the RBI. We know how to build the RBI to do monetary economics and banking regulation. We do not know how to build the RBI to make commercial decisions. It is unreasonable to ask the RBI to get into the driver’s seat when dealing with bad assets.

The bureaucracies in banks have fumbled