Indias corporate debt repayment rate is abysmally low: Only 25.7 cents to a dollar loaned (or Rs 17 on Rs 67 lent) ever returns to the lender after years of protracted recovery proceedings.
The countrys debt recovery rates trail even the South Asia average (36.2 cents) and, obviously, the OECD average, says the World Bank. This isnt good news for Indian banks staring at a bad-debt accumulation of Rs 6.68 lakh crore. Furthermore, the existing legal and reparation infrastructure such as debt recovery tribunals (DRTs) and SARFAESI Act is inadequate for handling the volume of recovery cases.
In DRTs, it takes anywhere between six and 20 years to get resolution. Only 20% NPAs, including SAFRAESI Act acquisitions, were settled during the…
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