Deutsche Bank AG is establishing an asset reconstruction unit in India, Bloomberg News reported March 18, citing people familiar with the matter.
The German bank is setting up the unit to buy and reorganize nonperforming credit as current Indian rules prohibit overseas investors from buying bad loans directly from Indian banks. Bank of America Corp. is also considering a similar unit, other people familiar with the matter told the news outlet. A representative from Deutsche Bank declined to comment, while a representative from BofA did not respond to Bloomberg's request for comment.
India revised rules in 2016 to allow overseas investors to fully own asset reconstruction companies in the country. However, few foreign investors have moved forward to create their own asset reconstruction units as the rules still require them to tie up with local units before they can buy soared loans.