India is currently in the midst of a mini banking crisis of sorts. The reason for this is the unwinding of large, unsecured loans made by its public-owned banks to large businesses, most prominent among which include a jewellery brand, a pen maker and a PC maker. The size of the now-soured loans to these companies? $1.7 billion, $570 million and $80 million, respectively.
Banks and startups: It’s complicated
Startups say banks are okay lending hundreds of millions of dollars to iffy diamond dealers and dodgy traders, but not to them. Banks say they need to safeguard depositor money. Will the twain meet?
Startups say banks don't understand their business models, and thus, they don't lend to them
Banks say they're not in the business of venture capital and must safeguard depositor money
Both sides would do well to understand each others compulsions, incentives and goals
Because, "If you don’t take debt in good times, you won’t get it in bad times"