In Nov 2013, RBI allowed Indian banks to borrow US $34 billion for 3 years. Reference. The exchange rate was guaranteed by RBI. Interest rates for US $ is much lower than the interest rate for Indian rupee. So many banks took advantage of RBI's scheme.
Now Indian rupee is falling. This means that banks borrowed at cheap interest rates and the exchange rate loss will be borne by Indian taxpayers. So effectively RBI has transferred the wealth of Indian taxpayers to mostly private banks.
This policy was architected by the then finance minister P. Chidambaram and RBI Governer Rahuram Rajan. Chidambaram did not give an extension to the previous RBI governer Subbarao. It seems that Subbarao was not willing to co-operate with Chidambaram's corrupt policies.
This is just an example of how wealth is transferred to big corporates with the blessing of government. Of course, the big corporates are happy to give huge donations to political parties.
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