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.

India’s Bank of Baroda expects to step up bad loan recoveries this financial year despite the temporary relief on repayments imposed by the central bank during the lockdown on the economy, Bloomberg News reported. That will help the country’s third-largest state-run bank improve its capital ratios and boost new lending, according to Executive Director Shanti Lal Jain. “We will be focusing on all avenues to recover bad loans including asset sales, one-time settlements,” said Jain, who heads Bank of Baroda’s stressed assets management and credit monitoring.

Amid the coronavirus pandemic, preventing a viable firm from prematurely being pushed into insolvency, addressing individual financial distress and other challenges for insolvency regimes can be addressed through simple, transparent and time-bound measures, according to a World Bank Group official, Business Insider reported. Mahesh Uttamchandani, World Bank Group -- Global Lead, on Wednesday also said that due to the pandemic, 100 million people who were uplifted from poverty globally would fall back into poverty.

Even as the Centre has temporarily suspended the Insolvency and Bankruptcy Code (IBC) due to the current economic crisis following the Covid-19 pandemic, academicians have highlighted the threat of a possible surge in riskier behaviour of firms under extended immunity from the IBC, Business Line reported. Earlier this month, the Centre had issued an ordinance to suspend initiation of fresh insolvency proceedings against defaults arising on or after March 25 for a period of one year.

A rally in the debt of Indian banks is running up against concern they’ll need to take on greater risks as world’s worst bad debt pile is set to weaken further, Bloomberg News reported. While average premiums on rupee-denominated Additional Tier 1 bonds of the five biggest Indian banks have fallen to about 200 basis points from the end of April, they are still up some 117 basis points this year. And some investors say the rally has little room to continue amid concerns India companies are getting downgraded like never before.