Former Reserve Bank of India Governor Urjit Patel has revealed that moves directed towards diluting bankruptcy law led to disagreements between the Union government and the central bank, according to a report by Bloomberg
In a book released Friday, Patel said that the government seemed to lose interest in the law in during the year when he resigned.
Also a circular issued by the RBI in February 2018, forcing banks to immediately classify borrowers as defaulters when they delayed repayments, led to the rift.
The circular also barred defaulting company founders from trying to buy back their firms during insolvency auctions.
“Instead of buttressing and future-proofing the gains thus far, an atmosphere to go easy on the pedal ensued,” Patel wrote.
