India’s top court extended the easing of rules over the classification of non-performing loans until further notice, delaying the disclosure of how much bad debt banks hold, Bloomberg News reported. The three-judge bench headed by Justice Ashok Bhushan on Thursday gave the government two weeks to come up with relief measures for virus-hit businesses and said such a decision had to be put before the court for consideration. It also reiterated that banks must not classify any loans as bad if they were performing at the end of August until further order.

Lenders will have to consider financial parameters such as liquidity and debt-servicing ratios while preparing a restructuring plan for loan accounts that have turned bad due to the coronavirus pandemic, the Reserve Bank of India said following the recommendations of an external panel, Bloomberg News reported. The central bank identified 26 sectors affected by the pandemic such as auto, aviation and tourism, which can be offered a resolution subject to criteria including debt-coverage ratio, outstanding liabilities and net worth at pre-Covid levels.

Finance minister Nirmala Sitharaman on Thursday asked banks and NBFCs to roll out loan restructuring scheme for COVID-19 related stress by September 15, and provide adequate support to the borrowers following the lifting of moratorium on repayment of debts, The Times of India reported. The minister urged lenders to immediately put in place a board-approved policy for resolution at the review meeting with heads of scheduled commercial banks and NBFCs through video conferencing.

Fraudulent transactions worth Rs 17,394 crore happened at debt-ridden mortgage firm DHFL during FY07 to FY19, according to transaction auditor Grant Thornton, Business Today reported. Earlier this year, the administrator of Dewan Housing Finance Corporation Limited (DHFL), appointed under the Insolvency and Bankruptcy Code (IBC), obtained assistance from Grant Thornton to conduct investigation into the affairs of the mortgage firm. Last year, the Mumbai bench of the National Company Law Tribunal (NCLT) had admitted the company for insolvency resolution.

Hospitality firms sitting on large debt piles are now looking to go for a one-time restructuring, with the moratorium period now over, Business Standard reported. On account of being highly leveraged, 15 per cent of the total 160,000 rooms —nearly 24,000 — are facing the risk of permanent closure, show industry estimates. The hospitality sector, by nature, has a high fixed cost structure and the lockdown led to significant erosion in revenues and margins. The industry now has its eyes set on the recommendations of the KV Kamath Committee.

The Securities and Exchange Board of India (Sebi) Wednesday allowed mutual funds to side pocket debt in cases where borrowers have approached the Asset Management Company (AMC) for debt restructuring, Mint reported. Earlier, SEBI rules only permitted debt downgraded below investment grade (rating below BBB-) or defaulted debt to be restructured. The new circular, which will be in effect till 31st December will allow even higher rates debt to be side pocketed. The date on which the restructuring proposal is received by the AMC is to be treated as the trigger date for side pocketing.

While the new board of IL&FS and the directors appointed by it on the subsidiaries of Infrastructure Leasing & Financial Services Limited (IL&FS) have immunity from prosecution in India for the actions of the group in the past, they may not have the same protection in cases filed against the group firms outside the country, The Indian Express reported.

India’s top court approved a plan giving phone companies 10 years to pay back a combined 1.4 trillion rupees ($19 billion) in outstanding fees, a significant concession from the original three month deadline but only half the time the carriers had sought, Bloomberg News reported. A three-judge panel on Tuesday said 10% of the dues must be paid in the first tranche and the written judgment, which is awaited, will provide more details on the repayment structure. Prime Minister Narendra Modi’s government had proposed a 20-year repayment window, which the telecom companies had supported.

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.