India banks warn of plunge in recoveries after bankruptcy ruling

A general view of Mumbai, India

NEW DELHI: A group of lenders led by State Bank of India, the country’s largest, foresees further distress in the nation’s bad-debt laden financial sector unless a recent court ruling in a closely watched insolvency case isn’t overturned.

An Indian court earlier this month allowed ArcelorMittal’s US$6bil purchase of Essar Steel, and also modified the distribution of the proceeds, saying the money has to be shared proportionately.