having implications for asset quality. In fact, this was one of the issues in the recent past in the context of forex derivative transactions. Till recently, we had only Credit Information Bureau (India) Limited (CIBIL), but the information asymmetry has continued on account of banks not transmitting data accurately and in time though there is steady improvement in this regard.
However, it does not follow from this that market forces necessarily have to work only ex post and continue to be “too slow and weak or too sudden and disruptive”. We must strengthen “gradual” market pressure. For that, I believe having pre-defined procedures for debt-restructuring and a well-designed crisis management framework would help greatly.