thinking that credit cycle unwind in country will take a bit despite the earnest intention of reform.
real estate inventory in the NCR region is estimated to be 75 months. interestingly direct transfer of subsidies to the recipients (well intentioned) reduces the fund flow to intermediaries (estimates of half to three quarters) and reduces the pool of capital and buyers for real estate !
ironically the bihar elections and increased influence of the subsidy intermediaries there may start to provide a floor to real estate prices
but the loans made in the system that are stressed will be stressed no matter the reforms because a thriving distressed asset investment does no exist and is challenged by existing regulations from collateral security, to bankruptcy, to taxation
http://www.livemint.com/Companies/9LltW1VGRSbh36simtaXYP/Standard-Chartereds-unraveling-India-bet-means-more-pain-ah.html
About $5 billion of advances Standard Chartered made to Indian borrowers have been internally classified as at risk of defaulting, in addition to the $1 billion of onshore loans that have already become non-performing in India, the people said.
real estate inventory in the NCR region is estimated to be 75 months. interestingly direct transfer of subsidies to the recipients (well intentioned) reduces the fund flow to intermediaries (estimates of half to three quarters) and reduces the pool of capital and buyers for real estate !
ironically the bihar elections and increased influence of the subsidy intermediaries there may start to provide a floor to real estate prices
but the loans made in the system that are stressed will be stressed no matter the reforms because a thriving distressed asset investment does no exist and is challenged by existing regulations from collateral security, to bankruptcy, to taxation
http://www.livemint.com/Companies/9LltW1VGRSbh36simtaXYP/Standard-Chartereds-unraveling-India-bet-means-more-pain-ah.html
About $5 billion of advances Standard Chartered made to Indian borrowers have been internally classified as at risk of defaulting, in addition to the $1 billion of onshore loans that have already become non-performing in India, the people said.
the group adopted a strategy of lending directly to the owners of large Indian conglomerates, rather than to their operating companies, the people said. It established ties with about 17 of India’s biggest business groups, most of which are family-owned. The aim was to then use those connections to sell more services to companies within the groups, according to the people.
The problem with the lending-first approach was that Standard Chartered lacked the deeper relationships that might have provided early warning signs that some borrowers were getting stressed, three of the people said.
Standard Chartered also kept an unusually large share of the risk by not syndicating the loans to the same extent as other banks did, according to the people. One reason for this was that efforts to sell part of the debts to Indian banks met with tepid demand because they’d already lent to the same borrowers, one person said.
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