The economic fallout from the Covid-19 crisis is likely to tip several of the world’s poorest countries into debt distress, forcing official creditors and private-sector lenders to accept a reduction or restructuring of loan repayments, the Paris Club group of creditor countries said on Tuesday, the Financial Times reported.

This isn’t the bottom for Chinese banks’ bad loans. Be prepared for more and weaker balance sheets. China’s lenders reported large declines in net profit for the first time in decades Sunday, citing dire economic conditions fueled by Covid-19, Bloomberg News reported in a commentary. In preparation to deal with ballooning bad debts and future losses, provisions rose sharply by 656 billion yuan ($95.8 billion) for souring loans. Prudent as that may seem, the worst is yet to appear. Much of this isn’t a surprise.

India has rolled out a fresh plan to tackle an old problem: the mountain of bad loans held by its banks, Bloomberg News reported. With the pandemic forecast to push soured assets to a two-decade high, Prime Minister Narendra Modi is struggling to find cash to support the state-run lenders that hold most of it, and to spur credit to a shrinking economy. Most of the risky debt is concentrated in two sectors -- telecoms and utilities -- that are vulnerable to the economic slowdown, meaning if they face more trouble, then a massive amount of debt goes bad.

A single-member bench of the National Company Law Tribunal (NCLT) can’t hear and decide on a company when the law requires a division bench, including both judicial and technical members, to constitute the adjudicating authority, The Economic Times reported. Indore-based Indison Agro Foods Ltd, which is facing insolvency resolution by Allahabad Bank in the Ahmedabad NCLT, had approached the National Company Law Appellate Tribunal (NCLAT), seeking appellate tribunal’s intervention for referring the matter to a division bench.

The Department of Telecommunications has moved the National Company Law Appellate Tribunal challenging UV Asset Reconstruction Co.’s Rs 6,630 crore resolution plan for the bankrupt cellular operator Aircel Ltd, arguing that the plan doesn’t address the “huge amount” of dues owed by the company against fees for telecom license and right to use spectrum, BloombergQuint reported. The appellate tribunal has directed the parties to file affidavits within five days and will next hear the matter on Sept. 11.

The wrecking power of Covid-19 was on clear display today as India announced a new world record for daily infections followed by a 23.9 per cent plunge in gross domestic product for the second quarter — the biggest contraction of any major Asian country, the Financial Times reported. India’s economy was already in a weak state before the virus hit, but the world’s biggest lockdown further hammered sectors such as manufacturing and construction and brought business activity to a near standstill.

Indonesia’s second-largest lender by assets says the nation’s companies are set to demand more loans, as they scoop up assets made cheaper by the pandemic, Bloomberg News reported. Some buyers are interested in assets that have become available after the virus and measures to stem it hurt Indonesia’s economy, Alexandra Askandar, corporate banking director at PT Bank Mandiri, said in an interview last week. Growth in loans to large businesses will likely accelerate in the second half from an expansion of 3.4% in the first six months, she said, declining to give an exact target.

Markets regulator Sebi on Monday asked credit rating agencies not to consider as default the restructuring of debt done solely due to COVID-19 related stress by lenders, The Economic Times reported. The move comes after the Reserve Bank of India (RBI) provided a loan restructuring window for corporates following bankers' and industry's demand. As per RBI, restructuring will be allowed as per the prudential framework issued on June 7, 2019.

Seven Thai airlines are seeking a combined 24 billion baht ($770 million) in low interest loans and other support measures, the government said on Friday, joining carriers across the world in requesting state help to weather the coronavirus crisis, Reuters reported. Airline executives made the request to Prime Minister Prayuth Chan-ocha, aiming to maintain liquidity and avoid layoffs, the government said in a statement. “The government will consider the requests from the airlines and find ways to support operations, including unlocking air travel, and boost domestic tourism,” Prayuth said.

India’s Finance Minister Nirmala Sitharaman will meet commercial banks and shadow lenders on Thursday to review implementation of loan restructuring programs following Covid-19 related stress, Bloomberg News reported. The meeting comes days after a debt payment holiday offered by the Reserve Bank of India’s ends. The central bank has since relaxed bad loan classification rules by allowing lenders the power to restructure certain loans. Banks are struggling to accelerate credit growth and are confronting a mounting bad debt pile that’s set to swell to a two-decade high.