By Shruti Srivastava and Santanu
Chakraborty
India’s finance ministry is in talks with the market
regulator about requiring publicly traded companies to promptly report any
missed interest or installment payments on borrowings, according to people with
knowledge of the matter.
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| SEBI Reguistered Company in Indore |
The Securities and Exchange Board of India’s earlier effort to tighten rules
was deferred days before it was to take effect Oct. 1 after some banks
questioned the requirement for disclosure within one working day, saying
standard assets can technically default for a short period, according to the
people, who asked not to be identified as the discussions are private. Talks
between the government and Sebi are ongoing, the people said.
Policy makers are turning the spotlight on dealings between
lenders and troubled corporates as India attempts to resolve about $210 billion
in bad loans, an issue that has gained urgency after the scam involving Punjab
National BankBSE -1.09 % came to light last week. The new rules would put the
onus for reporting defaults in real-time on companies and help to hasten the
recognition of stressed assets by banks, the people familiar said.
In its August circular, Sebi defined default as the
non-payment of interest or principal in full on a pre-agreed date. Disclosures
would need to be made within one working day from the date of default starting
Oct. 1, 2017, the circular had said.
The rules, if implemented, would help reduce instances of some lenders having
more or better information, said one of the people.
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