Tata Steel now has Bhushan Steel in the bag—barring any last-minute glitches. The lenders have got a good deal, thanks largely to the upswing in the global steel cycle. It’s no surprise that the first big case to be resolved under the new bankruptcy framework has been widely welcomed. This ushers in a new era in Indian capitalism.

There has been uneven progress in the rest of the cases that the Reserve Bank of India (RBI) forced banks to take to insolvency court last June. Litigation is piling up. The tricky issue of whether promoters of defaulting firms should be allowed to bid for the companies they controlled remains. So does the problem of whether bids made outside the formal insolvency process should be considered valid. Lying ahead are political challenges in cases where lenders have to accept large haircuts or where there are job losses because of liquidations. These hiccups are inevitable for any new regulatory system.

There is no doubt that a good beginning has been made. Lending in the next credit cycle will hopefully be more disciplined as a result.

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