India Provides Creditors Path to Recover Loans From Insolvent Shadow Banks
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India unveiled rules to help creditors recover loans due from large shadow lenders as a prolonged upheaval in the nation’s credit markets raises the risk of defaults by the financiers.
The amended law provides a generic framework for insolvency and liquidation proceedings of systemically important financial services providers, other than banks, according to a government statement on Friday. The 15-month-old credit crisis has choked economic growth to its slowest pace in six years, while company defaults on rupee bonds are at a record high.