
India’s Bad Debt Is Looking Better to Investors - JumpCrisscross
https://www.nytimes.com/2017/05/29/business/dealbook/indias-bad-debt-is-looking-better-to-investors.html
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sumanthvepa
Sure it's looking good to investors, but we, the Indian taxpayers (and
domestic investors) are financing the losses incurred in the distress sales.
While I understand that the Indian government and the Reserve Bank of India
need to get India's banks to write down non-performing assets on their books,
the interests of the Indian taxpayer and domestic investors need to be taken
into accout. The Indian government needs to ensure that there is no disorderly
unwinding of the debt markets that hurts citizens.

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rama_dan
> The Indian government needs to ensure that there is no disorderly unwinding
> of the debt markets that hurts citizens.

You saying that suggests you think they actually give a flying fuck about the
citizens or their interests. In reality they don't, of course.

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sage76
I don't know why you got the downvotes. Caste politics has been rampant in
India. Fiscal management is an afterthought, if at all that. Most of the
elected officials and bureaucrats are there to line their pockets. Not unlike
some other countries, like Russia.

I have friends who had to pay bribes for every little thing, company
registration, getting the VAT certificate, Police verification etc.

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rama_dan
> Most of the elected officials and bureaucrats are there to line their
> pockets.

That's the same everywhere of course. In some countries it's just more blatant
and short-sighted than in others.

> I have friends who had to pay bribes for every little thing, company
> registration, getting the VAT certificate, Police verification etc.

Yyep! And all those pointless bullshit requirements are in place so that
plenty of pissy little parasites get to collect their bribes.

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jaggi1
I have politicians in my family in India and this is actually an end-game for
the politicians. This was damn too common with "urban banks" which are like
credit unions. Last Indian president Mrs. Pratibha Patil was charged with such
frauds during her political career.

This is how it worked with "urban banks". A politician sets up a bank and gets
it running smoothly. Such banks can operate only on small deposits and limited
to local area only. They are subject to different banking rules and can give
much higher returns and aggressive loans. The banks typically do well.

As the elections nearby the politician and his friends will borrow huge loans.
New projects will be setup with these loans. After an year or so the project
declares bankruptcy and the loan becomes and NPA. Politician's friend buys the
stalled project at throw away costs and then if needed sells back to the
politician. Wealth is thus transferred from poor folks to rich politicians.

This time however it has happened with major banks.

The MD of India's top private bank makes around $5M-$10M a year. The Public
sector bank MD however makes around $50K max a year. that is 10x less salary.
The banks themselves are a giant jobs program.

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imron
Package it up, rate it AAA, what could possibly go wrong? /s

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wanda
Don't forget the part where you insure and bet against it!

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rtx
This is Russian Oligarchs all over again

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osrec
Changing the law is one thing, tackling the corruption in the legal system
another. I'm really not sure if this makes it all that more attractive to me
as an investor; in a place like India, you never which corrupt person or
entity is going to screw you!

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rajeshwadhwani
>I'm really not sure if this makes it all that more attractive to me as an
investor

The article talks about foreign investments being attractive now specially in
distressed assets and bad debts.Prior to this investment in this particular
sector was relatively very slow and underperforming.The regulation of the
default being handled in 180 days is a brilliant move.

>in a place like India, you never which corrupt person or entity is going to
screw you!

Investments in a country depend on a lot of factors, corruption being one of
them.India from a pure market point of view is still one of the top lucrative
investment opportunity for all investors. I think having a holistic point of
view that Indians and Indian entities are out there to screw every investor is
totally a childish point of view! India does have problems and are working
hard to solve them.

