In my reckoning 50 percent of the job of the regulator is completed if the right persons are appointed and the corporate governance guidelines are observed in letter and spirit. Sixth, there have been certain apprehensions expressed about the risks to which the banks have been exposed or will be exposed in the future in light of the rising interest rates.
There are two strands of criticism on this count. There are those who believe that there will be more defaults on consumer loans as interest rates go up. It is always true that the default rate will be higher under a rising interest rate scenario compared to low interest rates.