Just two years ago, when Prime Minister Narendra Modi 's government was planning to clean up the bad debt of state banks, it seemed a messy and arduous task. It doesn't just want to tackle the bad debt but also wants to discourage companies to default in the first place.Now, the Securities and Exchange Board of India (Sebi) wants companies to disclose payment failures. With the new Sebi norm, borrowers will not be able to resort to this loophole.The banks for long avoided taking on the bad debt problem head on. But the government wants banks to bite the bullet now and go through the tough measures it has initiated against bad loans even when they won't like to. RBI plans to direct banks to set aside 50% of bad debt as soon as a referral happens, and 100% if the tribunal orders liquidation.

Source: Economic Times July 26, 2017 09:00 UTC