Letter to BS: Striking down RBI's Feb 12 circular a big blow to banking

This decision will set the clock back as far as progressive measures are concerned

This refers to “Setback for RBI” (April 3). I have the deepest respect for the highest court of the land. The striking down of the February 12, 2018, Reserve Bank of India (RBI) circular in its entirety will however have far reaching adverse implications for the banking system. First, it would in effect revive the various forbearance/restructuring schemes in various forms introduced by the RBI that enabled banks to conceal and delay the classification of bad loans as non-performing assets (NPAs).

Second, the banks would be able to keep some of the biggest bad loans out of the scope of