India needs a strategy to get the government out of banking. Non-performing loans among state-owned banks -- a legacy of India’s socialist past which account for nearly 70 percent of deposits -- have crossed 5 percent of GDP, a Bloomberg View reported. The central bank has restricted lending at 11 of them and forced one, IDBI Bank Ltd., to sell itself to the government-owned Life Insurance Corporation of India. State banks have repeatedly been a burden on the exchequer and will almost certainly continue to be so.

IBBI Chief M.S. Sahoo on Thursday said the process to put in place a framework for cross-border insolvency cases is under way. The government is keen to introduce a globally accepted and well-recognised cross-border insolvency framework, which would also make India an attractive investment destination for foreign creditors, given the increased predictability and certainty of the insolvency process, The Hindu reported. Asked about the status of cross-border insolvency, Mr. Sahoo said, comments have been invited.. and have also been received.

Reliance Industries Ltd., India’s second-largest company by market value, plans to raise about 400 billion rupees ($5.8 billion) in fresh debt this financial year as it expands its consumer businesses, according to people familiar with the matter, Bloomberg News reported. The billionaire Mukesh Ambani-led company will raise funds through loans and bonds, mostly in the Indian currency, the people said asking not to be named as they are not authorized to speak to the media.

Russia's VTB Capital-backed Numetal on Tuesday said Ruia family scion Rewant will never be in management of Essar Steel even though the rules do not bar blood relations of delinquent promoters from bidding for loan defaulter companies being auctioned to recover dues, Firstpost reported. During the proceedings of the National Company Law Appellate Tribunal (NCLAT), senior advocate Mihir Thakore representing Numetal said that the Insolvency & Bankruptcy Code (IBC) does not disqualify anyone based on blood relations. Aurora Enterprises Ltd (AEL) had a 25 percent shareholding in Numetal.

Lenders to the bankrupt Videocon Industries have filed an insolvency petition against 13 subsidiaries of the Venugopal Dhoot-led company to recover their dues, sources close to the development told FE. Most of these subsidiaries are likely to be admitted by the National Company Law Tribunal (NCLT) for insolvency proceeding by next month, Financial Express reported. The insolvency petition against Videocon Industries, which was filed by State Bank of India (SBI) in January, was admitted by the tribunal on June 6.

The Hyderabad Bench of the National Company Law Tribunal (NCLT) has given its nod for Corporate Insolvency Resolution Proceedings (CIRP) to be initiated against Ramky Infrastructure Ltd, Bar & Bench reported. The company is publicly listed and has a paid-up share capital of over Rs. 57 crores. Judicial Member Bikki Raveendra Babu passed orders after hearing a petition filed by one of Ramky’s operational creditors, Todi Minerals Pvt Ltd.

The role of insolvency resolution professionals (IRPs) and their ability to handle day-to day affairs of bankrupt companies has come under the spotlight with the NCLT questioning their decisions in a few recent high-profile insolvency cases, The Hindu reported. At last count, there were over 1,800 registered IRPs wading through a pile of over 9,000 cases. Stakeholders are demanding that the law should allow appointment of insolvency resolution entities rather than IRPs.

Tata Steel Ltd will be able to nearly double its capacity in India as a deal between its British entity and Germany's ThyssenKrupp will reduce the Indian parent's debt, the chairman of the company said on Monday. Tata Steel and ThyssenKrupp signed a deal on Saturday after months of negotiations to form Europe's second biggest steel company in which Tata and ThyssenKrupp will have a 50:50 partnership, the International New York Times reported on a Reuters story.

Hundreds of companies are headed for bankruptcy proceedings in India, and that’s a good thing. A new bankruptcy code sets a tight timetable for a defaulting company to deal with its debt: If it doesn’t come up with a solution in nine months, the company is liquidated, The Wall Street Journal reported. In May, Bhushan Steel Ltd. became the first of a group of large defaulters pushed into the bankruptcy court by the central bank to be resolved under the new rules. It was sold for $5.2 billion, and creditors recovered almost two-thirds of what they were owed.

Imagine India’s GDP growth had collapsed to 3 percent; inflation was about to hit double digits; exports were tanking; and the country’s twin deficits – in the government’s budget, and in the nation’s current account – were out of control. It’s only when the Reserve Bank of India tries to imagine such a dire scenario for March 2019 that its simulation exercise for bad loans throws up a figure of 17.3 percent of state-run banks’ total assets, a Bloomberg View reported.