(Bloomberg) -- India's finance ministry is in talks with the market regulator about requiring publicly traded companies to promptly report any missed interest or installment payments on borrowings, according to people with knowledge of the matter.
The Securities and Exchange Board of India's earlier effort to tighten rules was deferred days before it was to take effect Oct. 1 after some banks questioned the requirement for disclosure within one working day, saying standard assets can technically default for a short period, according to the people, who asked not to be identified as the discussions are private. Talks between the government and Sebi are ongoing, the people said.
Policy makers are turning the spotlight on dealings between lenders and troubled corporates as India attempts to resolve about $210 billion in bad loans, an issue that has gained urgency after the scam involving Punjab National Bank came to light last week. The new rules would put the onus for reporting defaults in real-time on companies and help to hasten the recognition of stressed assets by banks, the people familiar said.
To read more on India's efforts to clean up bad loans, click here
A call to finance ministry spokesman D.S. Malik wasn't answered, while spokesmen for Sebi and the Reserve Bank of India didn't immediately respond to emails seeking comment.
In its August circular, Sebi defined default as the non-payment of interest or principal in full on a pre-agreed date. Disclosures would need to be made within one working day from the date of default starting Oct. 1, 2017, the circular had said.
The rules, if implemented, would help reduce instances of some lenders having more or better information, said one of the people.
--With assistance from Anirban Nag and Anurag Joshi
To contact the reporters on this story: Shruti Srivastava in New Delhi at ssrivastav74@bloomberg.net, Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net.
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Candice Zachariahs, Ravil Shirodkar
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