Gurus of Chaos: Modern India's Money Masters

by Saurabh Mukherjea

‘Banks take working capital as collateral and because this loan has collateral against it, you are saying that this bank is very well protected. So let’s assume that tomorrow this borrower defaults, is the bank safe? Can the bank actually sell inventory of semi-finished steel products? Who will be the buyer for such products? There is no liquid market for these products. The fact it is valued on the balance sheet at such-and-such price does not mean that the bank is safe.’

Important whether wc collateral can be liquidated to rrcoup wc loans