Patel complains of ‘deep fissure’ in Indian regulation

urjit-patel
Urjit Patel: “the fault line is bound to lead to tremors”

The Reserve Bank of India is not able to hold public sector banks to account as strictly as it can with privately-owned firms, governor Urjit Patel complained on March 14, highlighting the “fault line” between the central bank and government.

“The market discipline mechanism for public sector banks is appreciably weaker compared to that at private banks,” Patel said, arguing public banks benefit from a stronger perceived sovereign guarantee.

In such an environment, one might expect the

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