The final part of a three-piece series on the early challenges confronting RBI Governor Sanjay Malhotra turns to regulation. The IndusInd Bank episode, still unravelling, offers a telling example of how the central bank responds to crises—and what it sometimes overlooks.Issues in the banking system have recently come to the fore, following the IndusInd Bank quagmire. So, the unravelling of this issue and the way the Reserve Bank of India has dealt with it offers useful insights into the dos and don’ts of regulatory action.
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