Letter to BS: The need of the hour is zero tolerance on bad loans

The need of the hour is zero tolerance on bad loans. Fiddling with accounting does not change the reality

It is heartening to see that Reserve Bank of India Governor Urjit Patel has ruled out any dilution in the norms of bad loans in the face of lobbying by banks and members of Parliament with respect to the power sector. In fact, stringent rules make sure serious attempts are made to clean the bad loan mess by putting the Bankruptcy Code to use. Hence, the plea of the infrastructure sector that it could not be built without accounting forbearance is unverifiable at best. Any attempt at regulatory forbearance will be a throwback to bad old days of disguised loans,