Indian companies have defaulted on a record 76 billion rupees ($1.1 billion) of local-currency and international bonds so far this year after the shadow bank crisis triggered a credit squeeze, and it doesn’t look like the worst is over, Bloomberg News reported. Those firms that delayed or missed debt payments in 2019 still have the equivalent of $17 billion of notes and loans outstanding including the defaulted securities, according to company documents, exchange filings and data compiled by Bloomberg. In the latest instance, tycoon Anil Ambani’s Reliance Capital Ltd.

India will spend about 410 billion rupees ($6 billion) on two unprofitable state-run telecommunication companies in a bid to help the firms take on competition, Bloomberg News reported. The government also approved a plan to combine Mahanagar Telephone Nigam Ltd., which provides services in Mumbai and New Delhi, with Bharat Sanchar Nigam Ltd., that services the rest of the nation, Telecom Minister Ravi Shankar Prasad said at a briefing in New Delhi on Wednesday. MTNL has reported losses in nine of the past 10 years, according to data compiled by Bloomberg.

About 25 group companies to which Dewan Housing Finance Corp. Ltd (DHFL) had lent a total of ₹14,000 crore had an average profit of about ₹1 lakh, a forensic audit of the company has found, raising suspicion that the mortgage lender may have diverted funds, Mint reported. Out of the around ₹27,000 crore worth of loans raised by DHFL from banks for on-lending to home buyers, around ₹10,050 crore was invested in mutual funds, the findings of the audit revealed.

A health check on India’s shadow banks shows the crisis in the industry is far from over. Indicators from liquidity to share performance show weakness, according to data compiled by Bloomberg as of Sept. 30, Bloomberg News reported. In recent weeks, another financier defaulted, it got harder for investors to cut losses in the sector’s debt and a mortgage lender altered financing plans due to waning appetite for shadow bank bonds.

More than two years back, the Reserve Bank of India (RBI) named Essar Steel as one of 12 companies whose non-performing assets (NPA) were clogging up the banking system, The Print reported. In its 13 June 2017 order, the central bank had also asked the lenders to initiate proceedings against these companies under the Insolvency and Bankruptcy Code (IBC) at the National Company Law Tribunal (NCLT). Accordingly, the NCLT bench in Ahmedabad started hearing insolvency proceedings against Essar Steel the same month.

Snatch-and-grab is the new hallmark of Indian finance. As a banker friend in Mumbai put it to me only half-jokingly, a unit of "grabbed" cash collateral in hand is worth more than two units of hypothetical receivables, a Bloomberg View reported. Yet this is no laughing matter. Not only is opportunistic behavior going to worsen India’s $200 billion-plus bad loan crisis, but now that everyone from the government’s sleuths to the courts are joining the melee, the ensuing chaos will limit the recovery for lenders and threaten depositors.

The resolution plans of debt-laden shadow lender Dewan Housing Finance Corporation Ltd (DHFL) have hit a roadblock after the custodian of DHFL bonds said on Thursday it is taking the firm to bankruptcy court on behalf of certain debenture holders, Reuters reported. The application was filed on Oct 16 in the Mumbai Debts Recovery Tribunal to claim 268.61 billion rupees ($3.8 billion), it said. The claim is: “for recovery of the amount of debentures outstanding, along with interest, for and on behalf of all debenture holders under all the three public issues,” the custodian said.

For years, the Essar Group, an Indian business empire built by brothers Shashi and Ravi Ruia, happily racked up debt, the Financial Times reported in a commentary. That changed more than two years ago when the government of prime minister Narendra Modi introduced a new bankruptcy regime that favoured banks over borrowers — however powerful the latter may have been. The Ruia family lost control of Essar in July 2017 when the country’s central bank ordered the bankruptcy code to be used against defaulters, including Essar Steel. Essar Oil was sold to a Rosneft-led group in 2017.

An Indian irrigation firm has been cut to “selective default” by S&P Global Ratings, as more cracks emerge in India’s offshore junk bond market, Bloomberg News reported. Jain Irrigation Systems Ltd. missed certain principal payments under its working capital facilities and S&P sees a “high likelihood” that the company would be classified as a nonperforming asset by its bankers. A selective default means S&P believes a firm has defaulted on a specific issue but will meet its other obligations.

The World Bank cut India’s economic growth forecast by the most among South Asian nations on Sunday, below the outlook pegged by the nation’s central bank for this year, mainly because of a deceleration in domestic demand, Bloomberg News reported. India’s gross domestic product growth is projected at 6% in the fiscal year started on April 1, compared with 7.5% forecast in April and 6.8% recorded a year earlier, the bank said in its latest South Asia Economic Focus report. Growth is expected to gradually recover to 6.9% in 2020-21 and to 7.2% in the following year, it said.