............What would cause real trouble is if banks are asked to do the politically expedient thing and help defaulting corporations meet overseas obligations. The central bank will have to resist such pressures and shield the commercial banking system as far as possible. Corporate bankruptcies and defaults, whether in rupees or in dollars, are liable to be less damaging than the alternative scenario of bailing out sick banks. The RBI needs to deploy all its skills and assert its independence to stem the rot in what is fast turning into an "annus horribilis" for the banking system.
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