India

Jet Airways India Ltd. has missed a payment to Indian lenders in the latest sign of mounting strains at the country’s second largest airline by passengers, after losses worsened a cash crunch, Bloomberg News reported. The setback underscores a lack of progress lining up sufficient funds for debt payments after the beleaguered carrier approached banks for a moratorium on loans and asked for fresh funds in October. Shares in Jet Airways closed down 6.1 percent, the sharpest decline in more than three weeks.

A new year, a new central bank governor. Yet the first salvo to come out of the Reserve Bank of India’s policy arsenal in 2019 is encouragement of good old “extend and pretend” lending, a Bloomberg View reported. Banks and shadow banks are being allowed a one-time restructuring of loans of up to 250 million rupees ($3.6 million) to micro, small and medium enterprises that were in default on Jan. 1, without having to mark them as nonperforming, the RBI said on Tuesday. Lenders are being given an extension of 15 months (up to March 31, 2020) to pretend that these stressed loans are standard.

India’s central bank will permit lenders to restructure stressed loans to small companies, breaking from a five-year-old policy of eschewing sweeping corporate debt overhauls, Bloomberg News reported. The Reserve Bank of India will allow one-time restructuring of loans to micro, small and medium-sized companies that are in default, the regulator said in a statement on Tuesday. To be eligible for the program, the loan should not exceed 250 million rupees ($3.6 million), according to the statement.

India’s central bank on Monday said the proportion of commercial lenders’ non-performing assets (NPAs) may fall slightly to 10.3 percent by March, thanks to measures including the creation of a bankruptcy code, Reuters reported. In June, the Reserve Bank of India (RBI) had said commercial lenders’ ratio for gross bad loans might even increase to 12.2 percent by March 2019, but they had fallen to 10.8 percent by end-September and now look to dip lower still.

Indian power companies spent much of the past decade rushing to build coal-fired power plants in anticipation of surging electricity demand as economic growth took off. Now, many of those projects are mired in deep financial distress and private investment in coal power has ground to a near halt, the Financial Times reported. The sector has been hit by a host of problems: many plants have struggled to secure fuel supplies, and to clinch deals to sell their power to cash-strapped state distribution companies.

Tasked with helping recover unpaid corporate loans, the National Company Law Tribunal (NCLT) has helped resolve insolvency and bankruptcy proceedings involving more than ₹80,000 crore in 2018, The Hindu reported. The kitty is expected to swell beyond ₹1 lakh crore in 2019 with several big-ticket default cases pending. Plans are afoot to further strengthen the NCLT by increasing the number of judges and benches, and providing adequate infrastructure to fast-track the process, according to Indian government officials.

After sending two pesky central bank governors packing in a little over two years, Indian bureaucrats have turned their attention to unwinding the monetary authority’s autonomy, a Bloomberg View reported. Their first move, unveiled Thursday, is an innocuous – even laudable – infusion of 410 billion rupees ($5.9 billion) into troubled state-run lenders, bumping up this fiscal year’s outlay for bank recapitalization by 63 percent to 1.06 trillion rupees. The fresh capital partially replaces a shortfall in the  2.11 trillion rupee bank recap announced in October last year.

Essar Steel Asia Holding, the holding company of the bankrupt Essar Steel that was controlled by the Ruias, on Monday told the Ahmedabad bench of NCLT that it was "highly unusual" for lenders to not even consider its debt settlement proposal which was higher than its rival offer, BloombergQuint reported. The Essar Steel Asia Holding had proposed to the committee of creditors, led by State Bank of India, to pay an upfront Rs 54,389 crore to retake the management of Essar Steel, but approached the National Company Law Tribunal after not receiving any reply from creditors.