Indirect Evergreening Using Related Parties: Evidence From India

Kashyap, N and Mahapatro, S and Tantri, P L (2022) Indirect Evergreening Using Related Parties: Evidence From India. Journal of Financial and Quantitative Analysis. pp. 1-31. ISSN 0022-1090

Full text not available from this repository. (Request a copy)


We identify a novel way of evergreening loans in India. A low-quality bank lends to a related party of an insolvent borrower, and the loan recipient transfers the funds to the insolvent borrower using internal capital markets. Incremental investments, interest rates charged, and loan delinquency rates collectively indicate evergreening. These loans are unlikely to represent arm’s length transactions or rescue of troubled related firms by stronger firms to prevent group-wide spillover effects. Indirect evergreening is less likely to be detected by regulatory audits. It has significant real consequences at the firm and industry levels.

Item Type: Article
Subjects: Finance
Date Deposited: 04 Jul 2023 18:25
Last Modified: 04 Jul 2023 18:27

Actions (login required)

View Item
View Item