MUMBAI: The arrest of former bankers who had approved loans to Vijay Mallyas Kingfisher Airlines will hold back Indias largest lender State Bank of India (SBI) from throwing a lifeline to a troubled company and proactively rejigging loans to give a business house a second chance.
In the course of meetings that followed last weeks highprofile arrests by the Central Bureau of Investigation, the state-owned high-street bank has chosen to let future restructuring of corporate loans be decided through proceedings under the bankruptcy code.
Banks often come together to lower interest charge, convert debt into equity, and stretch loan repayment period to help borrowers tide over difficult times and deal with failed businesses.
But with ban…
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