In most countries, entrepreneurs who hit a rough patch were forced to plead with their bankers to keep their companies, and would therefore take whatever deal their lenders offered. But in India the deals worked the other way round. “The essential game was that if you were an industrialist, and you got into trouble, then you don’t have to pay back unless you want to,” Rajan told me. “And the only reason you want to pay up on one loan, is if you want to get more loans in return.”
