While stakeholders within the system have complained that the rules may hurt clean bidders too, the insolvency and bankruptcy board appears in no mood to review the ordinance.
In the last year, the Centre has moved to swiftly clamp down on Chinese steel imports to help NPA-laden Indian firms. However, China’s own capacity cutbacks have rendered this move meaningless.
Over the past two years, Prime Minister Narendra Modi’s government has pushed banks to recognise non-performing assets, make adequate provisions for them and try to raise capital from outside to bolster their balance sheets.
The RBI governor’s no-nonsense attitude in dealing with debt default did not go down well with the big business interests, leaving the political class feeling uncomfortable and insecure.