India has taken its most radical step yet to resolve its bad loan problem after the central bank last week ordered lenders to start insolvency proceedings against the country's largest defaulters. The RESERVE BANK OF INDIA said in a statement that it had referred 12 stressed accounts for resolution under the Insolvency and Bankruptcy Code. The move gives borrowers and their lenders six months to reach agreement before liquidation proceedings begin. The move comes only a few weeks after the government issued an executive order tweaking the Banking Regulation Act, which granted the central bank powers to direct lenders to initiate insolvency proceedings against defaulters.
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