Deutsche Bank Is Setting Up a Bad-Loan Buying Unit in India
- Asset reconstruction company will buy, reorganize bad credit
- India has over 29 ARCs, but few are fully foreign-owned
Pedestrians walk past stores at a wholesale market in the Old Delhi area of Delhi
Photographer: Anindito Mukherjee/BloombergDeutsche Bank AG is setting up a unit in India to buy and reorganize soured debt as it seeks to profit from an unprecedented bad-loan clean up in the nation with one of the world’s worst non-performing loan ratios, people familiar with the matter said.
The German bank felt the need to have its own asset reconstruction company to buy and reorganize non-performing credit as current Indian rules restrict overseas investors from buying soured loans directly from lenders in the country, the people said, asking not be identified as the information isn’t public. Bank of America Corp. is also considering setting up a similar unit, other people familiar with the matter said.