Patel's war on delinquent Indian borrowers gets boost from Modi
India amends law to give the central bank power to spur lenders and borrowers to take write-downs
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Mumbai
RESERVE Bank of India governor Urjit Patel has been given the ammunition to finish a war that his predecessor Raghuram Rajan started - the fight to eliminate US$180 billion of stressed assets.
After at least three proposals to reduce the world's highest bad-loan ratio failed to reduce delinquent debt, India amended a law to give the central bank power to spur lenders and borrowers to take write downs. The move is an opportunity for Dr Patel, who has surprised the market with his monetary policy decisions, and has been criticised for his lack of communication in the wake of Prime Minister Narendra Modi's move to ban 86 per cent of the nation's cash, to revive credit growth that's expanding at the slowest pace since 1992.
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