A few board directors are likely to resign in protest in the coming weeks.
With a net debt of 443 billion rupees as of end-March, RCom is the most leveraged among listed Indian telecom companies.
Obese banks are generally unhealthy for the economy. But the government is happily fattening banks thinking they are becoming “stronger” in the process.
The extra provisioning needed would reduce the profits of creditor banks by about a quarter in the financial year to March 2018, according to India Ratings.
While the loans are costlier than those offered by banks, which charge around 12% on average, they are processed more quickly and require little paperwork.
The move comes on the same day the President promulgated an ordinance aimed at tackling the bad loan crisis in India’s public sector banks.