Foreign portfolio investors can now invest in Indian bonds that are in defaut partly of fully if the residual maturity is at least three years. The Reserve Bank of India has come out with guidelines in this regard. This would mean banks, which have given loans to companies in stress, can clean their balance sheet by selling these stressed assets. Foreign portfolio investors can buy these at a heavy discount and then compel the defaulting entities to perform. It is estimated that excluding financial companies, the BSE 500 entities together have Rs 27 lakh crore of debt in their books. According to RBI data, 11.1% of total bank advances of Rs 68 lakh crore were stressed as on March 2015. While 4.6 per cent of these loans were bad debts, the rest of the stress came from restructuring. The default category or ‘D-bonds’ are the lowest form of what are termed junk bonds. Globally, the distressed debt market is huge. In the US alone, it is estimated at not below $300 billion.