The proposed corporate debt restructuring (CDR) of at least five troubled Andhra Pradesh-based microfinance institutions (MFIs) is set to take off because banks might relax the stiff terms in the form of personal promoter guarantees, livemint.com reported. The deadline for completing the CDR process expires on 6 June.

The Air India board, in a meeting in Mumbai yesterday, cleared the debt restructuring plan of the airline, the Business Standard reported. The plan was prepared by SBI Capital market Ltd (SBICAPS) and vetted by financial advisory firm Delloite, after the Reserve Bank of India asked the airline to get it done by an independent firm. “The plan will now be discussed by the civil aviation ministry and the RBI, and our high-cost debt will be converted to low-cost.

The Indian Railways’ great “turnaround story”, which was making waves in business schools till a few months back, now appears headed towards an ignominious end, IndianExpress.com reported. A sharp decline in earnings and a serious escalation in expenditures are threatening to push India’s transport behemoth to near-bankruptcy.

A senior Hero Group executive has been arrested for allegedly receiving a part of more than 3 billion rupees ($67 million) believed to have been misappropriated at a Citigroup Inc. bank branch on the outskirts of New Delhi, the Wall Street Journal reported today. The executive, Sanjay Gupta, allegedly got about 200 million rupees, said Assistant Commissioner of Police Dalbir Singh. A court has allowed the police five days custody of the employee for questioning.

Indian mergers and acquisitions in 2011 may surpass this year’s record $71 billion of deals, led by oil and gas, metals and mining companies, according to M&A bankers, Bloomberg News reported today. Billionaire Sunil Mittal’s $10.7 billion acquisition of mobile-phone operators in Africa led an almost four-fold increase in takeovers this year as deals surpassed 2007’s $69 billion, according to data compiled by Bloomberg.

State Bank of India, the country's largest lender by assets, today tapped into the debt market to raise short-term funds for the first time in three months, as the banking system continued to face a severe liquidity crunch, the Wall Street Journal reported today. The state-run bank privately placed 11.50 billion rupees ($255 million) of certificates of deposit maturing in March and the deposits will pay a yield of 8.97 percent.

The chief executive of the Indian Banks Association indicated today that banks will ensure microlenders remain fully funded in the short term to help them overcome temporary hiccups in repayments and maintain business as usual, the Wall Street Journal reported today. Indian microlenders have been plagued by liquidity issues after the southern Indian state of Andhra Pradesh recently enacted laws to tighten regulation of the microfinance industry.

India’s rapidly growing private microcredit industry faces imminent collapse as almost all borrowers in one of India’s largest states have stopped repaying their loans, egged on by politicians who accuse the industry of earning outsize profits on the backs of the poor, the International Herald Tribune reported. The crisis has been building for weeks, but has now reached a critical stage.

Kingfisher Airlines Ltd., India’s second-biggest domestic carrier, said it got preliminary approval from lenders for a debt restructuring plan to cut interest costs and benefit from rising demand for air travel, Bloomberg reported. “The bank consortium has agreed generally to the package,” Ravi Nedungadi, chief financial officer at the carrier’s parent UB Group, said today by phone.

India’s microfinance companies are offering their 6.7m borrowers in Andhra Pradesh the option of restructuring outstanding loans that amount to up to $2.7bn, in an effort to defuse a political backlash against a business once touted as alleviating poverty, the Financial Times reported. The offer, which will be made to borrowers over the coming week, is a tacit concession by the microfinance institutions that many of their small, poor clients are facing serious difficulties in keeping up with weekly debt repayments.