Slow burn at India’s new bad bank
What seemed like the answer to bankers’ prayers is mired in regulatory reluctance, with the big questions on India’s bad loan crisis still unanswered.
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Editor's note: When one looks back at the history of bad loans in the Indian banking system and the various attempts by bankers to recover their dues, the term “delay” will feature prominently at every step of the process. One example is Amtek Auto. In June last year, bankers were certain that the insolvency process for the automotive parts maker was in its final leg and a three-year court-monitored process would come to an end. The company, which owed banks over Rs 9,000 crore in loans, was on the “dirty dozen” list of big corporate defaulters referred to the bankruptcy process by the Reserve Bank of India back in 2017. This was the first set of cases under India’s new Insolvency and Bankruptcy Code, which came into effect in 2016. In the Amtek case, it was initially expected that the Liberty House Group would take over the company after its plan had been accepted by bankers and the National Company Law Tribunal in July 2018. But Liberty never paid up, and so the lenders moved the NCLT to order a fresh resolution …
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