Visible at Sanction
The weakness later blamed for the failure was, in most files, already visible in the origination file.
The situation
Every large bank measures borrower quality — through scorecards, ratings and early-warning systems. Almost no bank runs an independent, calibrated read of the sanction decision itself: whether verification was followed, whether risk dissents were answered, whether the exposure was framed against the rules that already apply.
This study analyses 50 cases from the public adjudicated record — 34 adjudicated large-credit failures set beside 16 comparable large borrowers that did not fail. In the well-evidenced subset of 30 failures, leverage and group structure were as common in the survivors as in the failures. What separated them was related-party lending, present in 19 of 30 failures and 0 of 16 survivors, and it was legible in the origination file before the outcome.
That is the exposure your board carries when the sanction decision is not independently measured. This report reads the origination file — not the default — and shows that the discriminating weakness was on the public record before disbursement.
Key findings
What the origination file already showed.
Leverage appeared in 13 of 16 comparable survivors and only 5 of 30 documented failures. Group-exposure appeared in both groups. Neither one is the discriminator.
19 of 30 failures carried related-party lending; 0 of 16 comparable survivors did. Governance override — a credit committee sanctioning against its own risk team — carried the same 3-of-30 vs 0-of-16 shape.
26 of 30 failures fired two or more origination signals. Failures are typically a weak borrower framed by a weak exposure, not a lone red flag.
Group-exposure led every infrastructure and real-estate project-finance case; assumption clustering led every trade-finance and working-capital case; related-party routing led the NBFC / financial-institution book. There is no single universal red flag.
The related-party and group-exposure pattern sits against the RBI's 25% connected-group cap. The assumptions-and-leverage pattern sits against the Master Circular's viability-and-sensitivity standard. Every leading signal maps onto a rule the bank already holds.
Only related-party lending is absent from every survivor.
Leverage and group-exposure show up in the survivors too, so neither one separates the two groups. Only related-party lending is absent from every survivor — the one signal that divides failure from survival.
Survivors are a comparable, deliberately-chosen set of 16 large borrowers that carried the same signals and did not fail — not a random sample.
Jaypee Infratech, the Yamuna Expressway developer, mortgaged 858 acres of its own land to secure the debt of its holding company Jaypee Associates. The Supreme Court held that transaction to be a preferential transfer under Section 43 of the Insolvency and Bankruptcy Code, reversing about 858 acres of land back into the insolvency estate. The origination file did not treat the pledge as related-party lending; the public record showed it was. This is the discriminator, in one file — a stable-entity asset routed to a distressed sister concern, on the record, before the default.
What's in the report
Ten sections, 43 pages, every case cited to a public document.
The next step is in your own book.
We can benchmark about twenty of your recent large sanctions against this discriminator and return a reviewer-disagreement rate, the share firing two or more signals, and a segment-weighted benchmark — with an executive readout in about two weeks.
NCLT and NCLAT filings and orders, Supreme Court judgments, SEBI orders, CBI charge-sheets and RBI supervisory publications — every case in the corpus tied to a citable public document. Full reference list in the report.