There's one sector in India that continues to be gripped by short-sellers: public sector banks (PSBs). As Reserve Bank of India (RB) governor Raghuram Rajan calls out for banks to clear their balance sheets of stressed assets, without offering a firm solution, the market has grabbed that opportunity and has started hugely short-selling state-owned banks. This situation is indicative of the failures of policy-makers and demonstrates regulators' lack of basic minimum foresight.
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