Bank chiefs unwilling to play ball just ask for an email or fax on the particular account and the requests are never repeated as no one would like to leave a trail for such requests. In the 1990s, the finance ministry used to play a passive role in pushing banks to buy government bonds sold to bridge India’s fiscal deficit. Typically, a bureaucrat would call bank chiefs and ask them to buy bonds.
Allowing multiple channels to work and compete with each other is the best solution to the MFI problem. One-and-a-half decade ago, state - run Indian Bank came very close to a collapse when its accumulated losses wiped out its equity and reserves. The Chennai-based lender had made huge losses as it had to set aside money to provide for its bad assets.