Banks set to crack down on big loan defaulters

Banks are set to refer a majority of the 28 loan defaulters cited in the Reserve Bank of India’s (RBI’s) second list to bankruptcy courts, as the central bank prods lenders to speedily resolve bad loans clogging their balance sheets.

After its first list of 12 large defaulters was sent to banks in June, RBI sent a second list of 28 troubled companies in late August, accounting for Rs.2 trillion of bad loans, asking lenders to find resolution plans for them or start insolvency proceedings.