India’s new plan to tackle $140 billion in bad loans: QuickTake

This article was written by Suvashree Ghosh and Jeanette Rodrigues. It appeared first on the Bloomberg Terminal. 

India has rolled out a fresh plan to tackle an old problem: the mountain of bad loans held by its banks. With the pandemic forecast to push soured assets to a two-decade high, Prime Minister Narendra Modi is struggling to find cash to support the state-run lenders that hold most of it, and to spur credit to a shrinking economy. Most of the risky debt is concentrated in two sectors — telecoms and utilities — that are vulnerable to the economic slowdown, meaning if they face more trouble, then a massive amount of debt goes bad.

1. What’s the plan?

When the pandemic slammed India early this year, the central bank allowed lenders to freeze loan repayments through Aug. 31. Jefferies estimates that borrowers accounting for 31% of outstanding loans took up the

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White House calls for Congress to release unused small business loans

Oct. 11 (UPI) — Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows on Sunday sent a letter to Congress calling for the release of unused Paycheck Protection Program funds amid ongoing talks on an additional round of COVID-19 stimulus.

Mnuchin and Meadows urged lawmakers to release the $134 billion in loans provided to small businesses to maintain operations and retain employees included in the $2 trillion CARES Act passed in March, while also criticizing Congress — particularly House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer — for their “all-or-nothing” approach to negotiating additional stimulus.

“The House has passed two separate partisan bills instead of compromising with us on bipartisan legislation like we have done in the past,” they wrote. “We will continue to try to work with Speaker Pelosi and Senator Schumer. It is not just about the top-line number but also about legislation

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Small-Business Loans Will be Forgiven, but Don’t Ask How

“We’re super nervous about the fact that we don’t know what’s going to happen,” she said. And the loan was only a temporary salve: With her revenue still down at least 30 percent, Ms. Kujala is preparing to lay off one of her employees.

A U.S. Bank spokesman said the bank was sending out invitations in stages to its forgiveness portal. After the bank was contacted for this article, a representative told Ms. Kujala that she would get an invitation soon.

Most borrowers — and their lenders — can afford to wait before seeking loan forgiveness. The CARES Act, which created the P.P.P., initially set repayments on any remaining debt to begin six months after a loan was disbursed, but Congress later revised the law to give borrowers as long as 16 months to apply for forgiveness. For most borrowers, that means the issue won’t become urgent until mid-2021.

But

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Goldman nabs GM credit card; did banks make any money on PPP loans?

Receiving Wide Coverage …

In the driver’s seat

Goldman Sachs “is buying General Motors’ credit card business for about $2.5 billion, a deal that furthers the Wall Street giant’s push into Main Street lending.” The bank, “a newcomer to the credit card space, won the bidding over Barclays, people familiar with the matter said, handing the Wall Street firm more than a million GM cardholders and their roughly $8.5 billion in annual spending.”

Goldman and Capital One, “which has issued GM’s card since 2012 and still has about a year left on its contract, have agreed on the outline of a deal, including the purchase price,” the Journal said. “It is the second win in the credit card sector for Goldman, which launched its first credit card last year with Apple Inc. and is on the hunt for other deals in co-branded cards.”

The portfolio has about $2.5 billion in

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