RBI deputy governor warns of moral hazard in debt restructuring


A deputy governor of the Reserve Bank of India, Kamalesh Chandra Chakrabarty, on August 11 warned of moral hazard leading to the overuse of corporate debt restructuring in India and outlined steps to address the problem.

Delivering a speech at a conference in Mumbai, Chakrabarty said the banking system in India had grown by just under 20% since 2009, while accounts being restructured rose by over 40%. He suggested that the restructuring process was tilted too much in favour of debtors

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