A brewing banking crisis

In its Financial Stability Report 2011, the Reserve Bank of India (RBI) concludes, rather bravely, that there are no major issues of stability and stress within the financial sector in general and the banking sector in particular. This is being said at a time when the banking sector seems set to slide, taking the ongoing industrial slowdown into its second stage and converting it into a macroeconomic crisis that will pervade the real and the financial side. Already, the currency and equity markets have been affected.

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