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Insolvency law caused rift with govt: Former RBI governor Urjit Patel

Instead of future-proofing gains, atmosphere to go easy on the pedal ensued, says his book

A move that surprised everyone
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“Since the time-bound threat of insolvency application is not credible anymore, it is unclear what threat points will compel resolution in 180 days (or, for that matter, even 365 days),” said Patel

BS Reporter New Delhi
The move to dilute the new bankruptcy law caused disagreements between the government and the central bank, former Reserve Bank of India (RBI) governor Urjit Patel says in his book Overdraft: Saving the Indian Saver, released on Friday.

Patel, who headed the RBI between September 2016 and his sudden resignation in December 2018, says the government seemed to lose enthusiasm for the legislation in the middle of the year he left the central bank.

The rift centred around a February 2018 circular issued by the RBI, which forced banks to immediately classify borrowers as defaulters when they delayed repayments, barred defaulting company

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First Published: Jul 24 2020 | 11:45 PM IST

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