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The banking industry is in a quandary after the Indian Banks’ Association (IBA), the premier industry lobby, withdrew its communiqué calling attention to a finance ministry letter on the treatment of stressed companies that have taken loans of up to Rs 200 crore.
The ministry’s letter had said banks are to work with the promoters of these companies to find long-term solutions, even offering a one-time settlement scheme. This was to ensure that “under no condition are companies forced into closure and job losses furthered”. It had observed that “banks, instead of arriving at a balanced solution, end up referring the
