About 10 days ago, the government took one more step, in a long list of attempts, to “resolve” the problem of bad loans. This time it is an ordinance, which adds two new sections to the Banking Regulation Act empowering the Reserve Bank of India (RBI) to act on non-performing assets (NPAs) or bad loans. Investors and businessmen have duly cheered this move as another strong step, from a nationalist, determined and purposeful government. But what exactly do the two new sections say? Under Section 35AA, the central government may authorise the RBI to issue directions to banks to initiate
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