There has been considerable progress in the implementation of risk management systems although there is a need for substantial upgradation of management information systems, preparation of contingency plans and stress testing. Internal systems need to be developed further for quantifying and monitoring operational risk. A major drag on financial sector reforms in India is the slow progress in the management of nonperforming assets (NPA).
I put more weight on a related argument: that for many governments it is politically easier to make concessional loans rather than grants, and that the IDA cum Paris Club approach in effect turns these loans into some sort of high-risk but concessional bond claim on the recipient country.