About 70 big companies with Rs 3.6 lakh crore debt face the risk of being taken to bankruptcy court from Tuesday as per RBI’s February directive that fixed a deadline to restructure stressed loans.
The central bank had in February set a 180-day deadline for banks to initiate bankruptsy procedure once payments are missed.
The measures mark the latest attempt by the RBI to clean up banks suffering from the world’s worst bad-loan ratios after Italy.
India has one of the worst bad-loan ratios among the world’s 10 largest economies, with the RBI predicting an increase to 12.2 per cent by March 2019 from 11.6 per cent in the previous year. That’s just behind Italy, where 14.4 per cent of gross loans are non-performing, according to data compiled by the International Monetary Fund (IMF).