India’s Latest Bank Rescue Lays Out More Creditor-Friendly Path

Creditors of smaller Indian bank lenders may have reason to cheer the central bank’s approach to the rescue of Lakshmi Vilas Bank Ltd., which contrasts with the bailout of a larger local bank earlier this year.

For one, the merger plan laid out by the Reserve Bank of India late Tuesday envisions the white knight -- DBS Group Holdings Ltd.’s India unit -- taking over the lender’s debt. That’s in part a consequence of a crucial difference in the proposed deal structure that contrasts with the rescue of Yes Bank Ltd. in March.