Rajan’s Departure Leaves India Bank Cleanup as Unfinished Task

Raghuram Rajan’s announcement that he won’t seek a new term as governor of the Reserve Bank of India leaves a key policy challenge to his successor -- the successful completion of a clean-up of more than $100 billion of stressed assets on the books of Indian banks.

Rajan’s campaign to force the country’s banks to recognize the true state of their bad loans culminated in a six-month asset-quality review that led to banks reporting a surge in bad-debt disclosures and higher losses earlier this year. But the March 2017 deadline set by Rajan for the completion of the clean-up will come after he leaves office in early September.