INSUBCONTINENT EXCLUSIVE:
Banks are concerned over future of loans owed to them by conglomeratesInformal talks are taking place to deal with the fall-out from two
rulings by Supreme Court that threaten the repayment of loans totalling nearly 500 billion rupees ($6.73 billion) to some of the country's
largest banks, bankers close to the matter say.Any failure to recoup the money adds to stress in the banking sector, which is already
dealing with an increased level of bad loans and reduced profits because of the impact of the pandemic.Last week, Supreme Court effectively
blocked Future Group's $3.4 billion sale of retail assets to Reliance Industries, jeopardising nearly $2.69 billion the retail
the Department of Telecommunications to renegotiate outstanding dues in a long-runinng dispute with telecom players.That raises concerns,
bankers say, over whether Vodafone Idea will repay some 300 billion rupees ($4.04 billion) it owes to Indian banks and billions of dollars
more in long-term dues to the government.FUTURE OF FUTURE?Two bankers, speaking on condition of anonymity said negotiations were taking
place to try to limit potentially severe consequences.Loans to Future worth nearly 200 billion rupees were restructured earlier this year,
giving it more time to come up with repayments due over the next two years, but that was on the premise that Reliance would bail it out, the
bankers said.Future group did not immediately respond to a request for comment.Should Future be taken to a bankruptcy court, bankers say
they are concerned they will have to take haircuts on the loans of more than 75 per cent."The immediate apprehension is that the
restructuring deal will fall through for banks by December," said a banker at a public sector bank that has lent money to Future.Future's
leading financial creditors include India's largest lender State Bank of India, along with smaller rivals Bank of Baroda and Bank of
India.Bank of India, the lead bank in consortium lending to Future, did not immediately respond to an emailed request for comment.VODAFONE
IDEABanks have also started discussing Vodafone's debt to lenders of nearly 300 billion rupees
Top lenders to Vodafone include Yes Bank, IDFC First Bank and IndusInd Bank, as well as other private and state-owned lenders.Vodafone, Yes
Bank, IDFC First Bank and IndusInd did not immediately respond to a request seeking comment."Even though banks have the option of
restructuring loans in case the company defaults, it will only make sense if there is clear cash flow visibility, which is not the case
right now," a senior banker at a public sector bank said on condition of anonymity.Already, at the end of March, banks had total
non-performing assets of 8.34 trillion rupees ($112.48 billion), the government has said
It has yet to provide more updated figures.
