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Central Banking: Indian Specific Issues
What is the 'twin balance sheet problem' in the Indian context?
It refers to the simultaneous stress on both bank balance sheets (due to large non-performing assets) and corporate balance sheets (due to heavy indebtedness), which weakened both sectors together.
What fundamental shift did FEMA bring compared to FERA in handling foreign exchange?
Shift from conservation and control to facilitation and management.
Which two sectors are central to India's twin balance sheet problem?
The banking sector and the corporate sector — banks accumulated large NPAs while corporates became heavily over-leveraged, stressing both their balance sheets simultaneously.
Under FEMA, who bears the burden of proving guilt in a contravention case?
The prosecution must prove the guilt of the accused person.
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