Indian lenders haven’t yet been able to restructure 12 stressed loan accounts in the power sector, underscoring the risk that these may be referred to bankruptcy courts after $52 billion of debt came under scrutiny following a central bank directive, Bloomberg News reported. It was thought that a resolution was possible in seven of these assets, the people said, asking not to be identified as the information is private. Under a central bank directive in February, lenders had until Aug. 27 to recast certain delinquent loans and a further 15 days to refer the cases under the nation’s bankruptcy law. Discussions on revamping the debt are ongoing and lenders may still reach agreement on some assets. India’s banks are suffering from one of the worst bad-loan ratios among major economies, and have been scrambling to restructure soured debt since the central bank laid out a new mechanism for dealing with such accounts earlier this year. The outcomes are being closely watched as they could become test cases for the bankruptcy code that India introduced in 2016 to help speed resolutions.
