The ₹6.50-crore repayment plan of media baron Subhash Chandra stayed by NCLT has once again put the saga of loans being forbidden by banks in India under the spotlight. Chandra’s plan covers admitted claims of ₹22,006.57 crore. That means lenders are set to recover only about 0.03% of the admitted amount, leaving a haircut of about 99.97%. Although, creditors are likely to recover higher amount than this through other means
This is an extreme example. But it is not the first time Indian lenders have accepted very large haircuts.
Over the years, several large companies have gone through the Insolvency and Bankruptcy Code (IBC) process. In some cases, banks recovered most of their money. In others, they recovered only a small part of…