India’s Supreme Court deals major blow to RBI bank clean-up

Supreme Court of India
The Supreme Court of India

The Supreme Court of India has dealt a major blow to the central bank’s efforts to force banks into cleaning up their balance sheets, ruling that a controversial circular was unlawful.

The court said in a brief statement it had deemed the Reserve Bank of India’s “February 12 circular” to be ultra vires, or an overreach of the central bank’s legal authority.

The circular, issued on February 12, 2018, required banks to class loans as non-performing as soon as a borrower defaulted. Non-performing

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