Not only was over-capitalisation no longer a serious option and the chance of deeper burden-sharing with bank creditors shut-off, but in addition some resolution actions had to be deferred lest they trigger an immediate cash call on the guarantee. Likewise, the absence at the outset of comprehensive specific legislation to deal with bank resolution exposed the authorities to litigation risks that slowed action.
Our new External Commercial Borrowing rules encourage infrastructure projects and other projects that have limited foreign earnings to either issue rupee Masala loans, or to borrow really long term tenors. This limits the risk that they will be required to repay when the exchange rate has moved adversely against them. Finally, the Government has been encouraging foreign investors to “Make in India”.