On Thursday, I suggested that India was striking the right balance by preventing only "willful" defaulters from bidding for their own assets in bankruptcies. The biggest lender, State Bank of India, has seen almost 10 percent of its loan book turn sour. For the five worst-hit state-run banks, nonperforming assets range between 18.5 percent and 25 percent.Yet what purpose will retribution serve? State Bank of India's new CEO, Rajnish Kumar, says he doesn't mind haircuts but doesn't want to go bald. The burden on taxpayers will be higher, not lower.A better approach would have been to dismantle the two halfway houses created before the 2016 bankruptcy law kicked in.

Source: Economic Times November 24, 2017 06:00 UTC