India

The head of India’s largest bank said the country’s escalating coronavirus outbreak risks jeopardising a years-long clean up of the financial system if authorities and lenders aren’t ready to step in and support struggling sectors like aviation or hotels, the Financial Times reported. Rajnish Kumar, chairman of the State Bank of India — India’s largest lender with over $500bn in assets — told the FT that pressures on the loan books of public-sector banks may require further capitalisation by the government, as well as rescheduling of debt and writedowns by banks themselves.

The NCLAT has upheld the NCLT order to initiate insolvency proceedings against HDIL, and rejected the plea of its promoter Rakesh Wadhwan, The Economic Times reported. A three-member bench of the appellate tribunal observed that the NCLT had given ample opportunity to Housing Development & Infrastructure Ltd (HDIL) to settle the matter amicably with its lenders, but it has failed to make the payment or arrive at a settlement. Earlier on August 20, 2019, the Mumbai bench of National Company Law Tribunal (NCLT) had directed to initiate insolvency proceedings a

India’s shadow banks are benefiting from a drop in borrowing costs after government stimulus steps, but the troubled sector faces more challenges ahead as the economy reels from the pandemic, Bloomberg News reported. The lenders’ borrowing costs declined in June for a second straight month, according to a gauge that’s among four indicators compiled by Bloomberg to check on the health of the industry.

National Company Law Appellate Tribunal has upheld initiation of insolvency proceedings against real estate firm Housing Development and Infrastructure, rejecting company director Rakesh Wadhwan’s appeal against a bankruptcy court order, The Economic Times reported. A two-judge bench of NCLAT, headed by acting chairperson Justice Bansi Lal Bhat, on Monday said there was no need for interference with a National Company Law Tribunal order dated August 20, 2019.

India re-opened for business in June after months of lockdown but for thousands of small entrepreneurs in the town of Meerut, near Delhi, the blow has been devastating, Reuters reported. Businesses from textiles to sports goods and furniture are shuttered or working at a bare minimum, and cows roam streets that would be normally packed with workers and vehicles.

As the crisis engulfing his business empire deepened, Bavaguthu Raghuram Shetty met with Bank of Baroda officials in mid-March to discuss the $250 million he and his firms owed, Reuters reported. The loans were granted on the strength of Shetty’s reputation as a billionaire and his businesses, in particular, NMC Health, the Middle East-focused hospital group he made his fortune from, according to court filings.

One of India’s biggest state-run banks said it had fallen victim to its third multimillion-dollar fraud in as many years, a stark illustration of the bad debts and weak defenses against misconduct that plague the country’s financial system, the Wall Street Journal reported. Punjab National Bank said yesterday that a customer, the ailing property lender Dewan Housing Finance Corp., had defrauded it of the equivalent of $491 million. In a separate statement, the bank said that its board had approved a plan to raise about $1.33 billion by selling shares and bonds.

The National Company Law Tribunal (NCLT) approved the resolution plan for bankrupt firm Amtek Auto, submitted yesterday by US-based hedge fund Deccan Value Investors LP (DVIL), the India Times reported. This brought to a close the three-year old case after the Supreme Court (SC) in June, refused to give more time for DVIL to assess the impact of the economic contraction caused by the pandemic. A two-judge bench headed by Justice Ajay Kumar Vatsavayi passed the order, which as per the law, provides DVIL with 30 days to complete the payments.

V2 Retail has settled its payment-related dispute with an operational creditor and expects to come out of the insolvency proceedings, according to Ram Chandra Agarwal, the Chairman of the suspended board of the company, IndiaRetailing.com reported. V2 Retail has made payment to the operational creditor, which had dragged it to NCLT, he said.

Indian conglomerate Bharti Enterprises is backing a bid for collapsed SoftBank-backed satellite operator OneWeb, two sources said, in a consortium that is supported by the British government, Reuters reported. OneWeb filed for Chapter 11 bankruptcy at the end of March after its biggest investor SoftBank Group Corp pulled funding, with an auction for the startup due to start on Thursday. London-based investment firm Unbound is run by the son of Indian telecoms tycoon Sunil Bharti Mittal, whose interests include telecoms and real estate.