RattanIndia Power Ltd., a electricity generator backed by hedge fund Farallon Capital Management, is close to restructuring about $500 million of stressed loans, Bloomberg News reported. The company, which is building coal-fired power plants to produce 5,400 megawatt of electricity -- enough to light up 7 million rural homes in India -- has offered to pay banks 52 percent of the obligations of its project in Amravati in Maharashtra state. The talks with creditors are on-going and there’s no certainty they will result in a transaction.

India’s state-run banks sought an easing of rules related to bad loan recognition in a meeting with newly-appointed central bank Governor Shaktikanta Das, people familiar with the matter said. The heads of seven banks also asked for a liquidity boost for the financial system to help non-bank financiers tide over a cash crunch, the people said, asking not to be identified as the discussions are private, Bloomberg News reported. An easing of lending curbs on 11 weak state-run lenders was also discussed, they said. Regulations have limited banks’ ability to extend credit.

Mutual funds in India can separate distressed and illiquid assets in their portfolios to deal with any potential credit crisis, the market regulator said on Wednesday. The Securities and Exchange Board of India (SEBI) was in talks with the industry to allay fears of contagion effect on mutual funds due to a liquidity crisis faced by the country’s non-banking finance companies (NBFCs), its chief had said last week, Reuters reported.

Jaypee group’s homebuyers on Monday moved the Supreme Court seeking modification of its August order which remanded the insolvency case against Jaypee Infratech (JIL) to the National Company Law Tribunal’s Allahabad bench to be started afresh. The homebuyers want the apex court to declare them “secured financial creditors” on a par with banks, the Financial Express reported. A bench led by Justice Madan B Lokur said it would come up for hearing before an appropriate bench.

Indian stocks are still holding on to gains for the year, but they’re evaporating fast. Exit polls last week from state elections were the latest hit to the market, sending the S&P BSE Sensex Index down as much as 1.8 percent on Monday, the most intraday since Oct. 19, Bloomberg News reported. The results showed that Prime Minister Narendra Modi’s party is set for tight electoral contests in key states before next year’s general election, adding to uncertainties in a market already hurting from fluctuating oil prices and defaults at an infrastructure financier.

The head of India’s central bank abruptly resigned on Monday in the midst of a bruising battle with the prime minister over the institution’s independence and the future direction of the country’s financial sector, the Financial Times reported. Urjit Patel’s exit comes just days ahead of what was likely to be a contentious meeting of the Reserve Bank of India’s governing board, where Prime Minister Narendra Modi’s demands for looser financial and monetary policies were scheduled for debate.

Vijay Mallya, the fugitive Indian tycoon fighting multiple cases in the U.K. after defaulting on loans, lost a bid to avoid extradition to his home country where he faces charges of fraud and money laundering, Bloomberg News reported. Judge Emma Arbuthnot ruled against Mallya at a hearing in London Monday, largely rejecting Mallya’s arguments that the case was politically motivated. "I do not accept the courts in India are there to do what the politicians tell them what to do," Arbuthnot told a packed courtroom.

Flows to India’s money funds hit a three-month high in November as calm returned to the credit market recently roiled by a rare debt default, Bloomberg News reported. Investors poured a net 1.4 trillion rupees ($20 billion) into liquid plans in November, industry data show. The inflow is the highest since August, a month before the funds suffered the worst outflows since at least 2007 amid defaults at the IL&FS Group. “Worries after that credit event are abating and people are returning to money markets,” N.S.

Jet Airways Ltd and second-largest shareholder Etihad Airways have been holding rescue talks with bankers of the indebted Indian carrier, three people aware of the matter told Reuters on Wednesday. Executives of the airlines met State Bank of India officials in recent days to discuss Jet's cash flow and business plan, two of the people said, the International New York Times reported on a Reuters story. One said Jet has outstanding dues of about $400 million (314.29 million pounds), mainly owed to lessors and vendors.

Etihad Airways is holding talks with Jet Airways Ltd and its bankers on a rescue plan for the debt-laden Indian carrier, two sources aware of the matter told Reuters. Executives from Etihad and Jet have met some of the airline's bankers in Mumbai in recent days to discuss ways to address its cash flow issues and evaluate the carrier's future business plan, the sources said.