In many other countries a period of major financial sector reforms ended in major restructuring and rationalisation of the banking sector, often because of unsustainable over-expansion in individual institutions.
The Reserve Bank’s concerns about the excessive increases in bank credit extension are not only for the effect it has on the total money supply, but also because of the inherent dangers of a concerted future major default in the servicing of the debt under less favourable macroeconomic conditions.