Indian commercial banks have commenced meetings with steel companies to avoid classifying loans extended to steelmakers as non-performing loans when closing accounts on March 31, 2016, a senior bank official said on Friday, March 25.
The official said that, with steel companies being the second-highest stressed sector, after the electricity distribution companies, banks are forced to classify as much as $7.57 billion as non-performing loans on the books when lenders close their accounts next week.
Over the past week, commercial bank lenders have held meetings with steel companies like Essar Steel, Visa Steel, Bhushan Steel and Electrosteel Limited as several of the steel companies have failed to pay their debts and lenders will have no option but to classify the loans extended as non-performing loans, as per the norms of the central bank, the Reserve Bank of India (RBI), the official said.