India's banking sector grapples with debt

Distressed loan buyers unable to help banks clean up their balance sheets


SET up over a decade ago to absorb India's mountain of distressed loans, asset reconstruction companies have done little to recover cash or relieve a debt-choked banking system.

Instead, at a time when regulators are pressing the banking sector to clean up balance sheets, the so-called ARCs are striking mostly paper deals that help lenders extend provisioning by years, camouflaging the scale of their woes.

"Banks are the risk takers of last resort. It's a vessel that contains all the risk and...

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