The finance minister asked lenders to identify eligible borrowers and reach out to them and urged for quick implementation of a sustained resolution plan for the revival of every viable business.
JSW Steel Ltd (JSTL) has announced a restructuring that unlocks value from Bhushan Power & Steel Ltd (BPSL) and changes the balance-sheet. JSTL will do a slump sale of 50 per cent stake in BPSL to Japan's JFE Steel in two equal tranches, totalling Rs 15,700 crore in cash.
India's crony capitalists will have had their day in the sun.
The Union Budget for 2026-27, presented by Finance Minister (FM) Nirmala Sitharaman on Sunday, which was a first, had an excellent domestic macro backdrop. According to the first advance estimates, gross domestic product (GDP) in constant prices is projected to grow 7.4 per cent in the current financial year, against 6.5 per cent in 2024-25.
The earlier deadline given for a Corporate Debt Restructuring scheme was July 31. According a senior counsel who is close to the development, Cash and Carry has requested for a meeting with secured and unsecured creditors to work out the compromise. C&C was a firm promoted by R Subramanian, promoter and managing director of Subhiksha. Subramanian was not available for a comment and he did not respond to an e-mail sent by Business Standard.
IBC-oriented pre-packs, the other mechanism under consideration, are a mix of out-of-court restructuring and a formal insolvency process, say experts.
Under the watchful eyes of five wise men, who know the industry well, banks will not find it easy to hoodwink the system, says Tamal Bandyopadhyay.
Banks have been patient and flexible in rescheduling loans.
SC expressed surprise that no steps were taken for recovery.
The new circular provides for a framework for early recognition, reporting and time-bound resolution of bad loans.
Banks to get more aggressive and act like PE investors
The petition was filed in 2003 by NGO Centre for Public Interest Litigation.
According to Fitch, the scheme could open a window for banks to build capital buffers while putting off full recognition of COVID-19 pandemic's impact on loan portfolios, but is reminiscent of a strategy adopted over 2010-2016 that delayed and exacerbated problems for banks.
The Reserve Bank of India has submitted a list of big loan defaulters in a sealed cover to the Supreme Court with a submission that disclosing their names may have "adverse impact" for business and may "accentuate failure of business".
What will be its impact on the banks's balance sheets? Since banks need to provide for 10 per cent of the loans restructured, they would need Rs 50,000 crores to Rs 80,000 crore for this purpose, notes Tamal Bandyopadhyay.
New SDR norms allow promoters to manage debt-laden firms.
The two nations share a problem of corporate debt gone bad that is so large and opaque.
The three options are - a one-time settlement, restructuring of loans and of course go to IBC.
The RBI should provide readily accessible summary information on its website about all corporate debt defaulters and the amounts involved.
Rather, the existing ones should be implemented speedily to clean up the mess.
The company said that intense competition following the disruptive entry of a new player, legal and regulatory challenges, high level of unsustainable debt and increased losses had together caused significant "negative business and reputational impact".
Banks given 180-day time for NPA resolution, matter to be referred to Insolvency Board within 15 days.
The major beneficiaries of loan recasting will be sub-Rs 500 crore corporate exposures and retail exposures, which were earlier expected to see the highest increase in NPAs in percentage terms.
'Mostly, the relief, if needed, would be for housing loans where a person has lost a job and is unable to pay his EMI or there has been a temporary salary cut.'
So far, among the IBC cases, SBI has been able to recover Rs 8,500 crore from Tata Steel's acquisition of Bhushan Steel. Another Rs 1,500 crore is in an escrow account on account of Electrosteel Steels.
To tackle increasing demand, the Union Ministry of Power has urged central and state public-sector power-generating companies (gencos) and state power and energy departments to pick projects that are undergoing insolvency proceedings. The power ministry is looking at a quicker turnaround of these stressed power plants and enhancing power supply. Increasing demand is pushing states to scout for more power sources. "It is requested that state-owned gencos may be encouraged to participate in the corporate insolvency resolution process (CIRP) of stressed power assets, which are of strategic and commercial significance to the capacity addition plans of the states concerned.
There is a case for analysing the fiscal deficit, separately for expenditure and investment.
To make sure liquid schemes reflect the underlying portfolio risks, Sebi has said all debt papers with maturity of 30 days or more to be marked to market. Earlier, fund houses didn't have to do so for securities that had less than 60-day maturity.
Corporate India is busy restructuring - through mergers, demergers and splits. That seems to be the new normal as CXOs and boards brainstorm on how to create assets and value. The pitch rose significantly during the third quarter of this financial year (FY24), translating into $32.9-billion worth of such deals - the highest quarterly total since the HDFC Bank-HDFC merger announced in FY22 Q2.
RBI deputy governor N S Vishwanathan has said the new framework was in line with the Insolvency and Bankruptcy Code guidelines.
Banks' bad loans might cross Rs 10 lakh crore by the end of this fiscal, mainly on account of slippages in retail and MSME sectors, a study said on Tuesday. "NPAs are expected to rise to 8.5-9 per cent by March 2022, driven by slippages in retail, Micro, Small and Medium Enterprise (MSME) accounts, besides some restructured assets," the study by industry body Assocham and ratings firm Crisil said. The study titled 'Reinforcing the Code' said the Gross Non-Performing Assets (GNPAs) of banks are expected to cross Rs 10 lakh crore by March 2022.
Lack of decisiveness and courage to deal with PSBs may turn out be the biggest impediment to the Modi government's economic initiatives, says Debashis Basu.
Companies with more than Rs 10,000 crore of debt would seek refinancing.
RBI may be inclined to impose severe restrictions on lending in the coming quarters.
Last year, the government had announced to infuse Rs 70,000 crore in PSU banks.
The EoI and the share purchase agreement would be issued in January itself for the bidders. While Air India's net loss in 2018-19 was around Rs 8,556 crore, its current total debt is around Rs 80,000 crore.
The gross bad debt of the Indian banking system as of March was at Rs 7.11 lakh crore
The management, however, is a bit wary about near-term performance.
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