SC order on insolvency circular is a blow but war on bad loans to continue

The starting point of the conflict between former RBI governor and the government was this circular; it turned acrimonious in due course and finally led to the exit of Patel

At the risk of being in contempt of court, I would love to say that Tuesday’s Supreme Court judgment in military parlance is akin to a “surgical strike” on the Indian central bank. The judgment is a big blow to the Reserve Bank of India’s (RBI) war against rising bad loans in Asia’s third largest and the world’s fastest growing major economy.

The apex court has set aside the February 12, 2018, circular of the RBI, which among other things directed banks to take the defaulting power, sugar, shipping companies to the insolvency court.

A bunch of power companies, as