Will India have a proper working bankruptcy law in place soon? The country's premier Narendra Modi certainly thinks so. At a technology summit in Bengaluru in the first week of October, Modi said his government was actively "working on a new bankruptcy code and a company law tribunal" intended to simplify the tax code, ease the process of doing business onshore, and deal with issues that often varied from state to state, such as how contracts were enforced and how companies were created and governed. This matters when you consider the underlying purpose of the pending law, which is to prop up and inject world-class levels of expertise, governance and purpose into an often-moribund domestic banking sector. By any measure, India's lenders, barring a selection of standout cases in the private sector, such as Axis Bank and Kotak Mahindra Bank, are in a terrible muddle. Public-sector banks (PSBs) control around 75% of the lending industry. Typically, they are bloated (27 PSBs employ a total of more than 850,000 heavily unionised staff), less profitable than their private-sector peers, and wasteful in that regular injections of capital usually generate not gratitude, but calls for yet more state aid.
展开▼
