A transfer of funds from depositors to robbers.

Though Prime Minister Narendra Modi is confident that India will definitely get its growth back, "Global forecasting firm, Oxford Economics on Tuesday said it expects India's GDP growth to lose momentum from late third quarter (October-December) of the current fiscal as the push from initial reopening fades. It further said India fares the worst in its Asia recovery scorecard, implying that the country will likely take the longest among major economies to converge to its pre-coronavirus growth level." The government is considering a direct monetization of its borrowing by the Reserve Bank (RBI). "Now Viral Acharya, a former deputy governor of the Reserve Bank of India and fierce advocate of RBI autonomy, has described monetizing deficits as a 'deeply flawed' approach and reminded us of the inflation outbreaks and external sector instability brought on by doing so in the past," wrote an editorial in the Mint. As for the threats of inflation and a fall in the rupee, "the danger of price spikes is arguably too low for it to deter public spending and cash giveaways at this point" and, if the rupee falls, the RBI "has sterilization tools at its disposal". The RBI "was under 'intense pressure' to open up 'liquidity and credit taps' to prop up the economy, and its crackdown against non-performing borrowers was being 'stayed'" said Acharya. The RBI "has been diluting some of the toughest measures prescribed for financial stability and its surplus liquidity has weakened inflation-targeting and shifted the goal post," said Acharya. Former Finance Secretary Subhash Garg dismissed Acharya's suggestion that Governor Urjit Patel quit "because of attempts to undermine the institution's autonomy", because Patel did not say so in his own book. However, he says that a circular issued by the RBI "seeking to tighten the Insolvency and Bankruptcy Code (IBC) was the cause for differences between the two sides". "The February 12, 2018 circular prescribed a one-size-fits-all approach that did not consider the specific nature of of particular sectors such as power, Garg said." Firstly, the government did not include any exemptions in the law and, secondly, this is a clear example between men of integrity, resigning their posts rather than allow misuse of funds, and civil servants, so willing to break the law. With compliant stooges in place, the IBC "which became one of the major tools for creditors to recover from the debtor has been suspended for one year". An RBI stress test for banks revealed that bad loans on their books will climb from 8.5% at present to 12.5%, wrote Aparna Iyer. "Their worst nightmare is this ratio climbing up to 14.7% under extreme duress due to the pandemic." The virus is not responsible for bad loans, the moratorium is. "Future policy on loan moratoriums remains a key issue for the Indian economy and the banking sector," said Christopher Wood. So what happens if a bank collapses from bad loans? Law abiding depositors will get only a lousy Rs 500,000 of their money back. The robbers are smiling.