The CFO who called the bank first survived

The CFO who called first survived. The other didn't.

Written on 17 July 2026, based on public reports at that time.

Two logistics companies, same city, similar size, hit the same wall around the same time. Freight rates had dropped, a large customer had delayed payments, and both were about to breach a loan covenant.

The first company’s CFO called the week he saw the breach coming, with the numbers, before the bank found out on its own. The bank sanctioned a temporary additional limit and eased working capital terms for a quarter. The account never left standard classification, because the numbers were still current.

The second CFO waited, hoping the next quarter would fix it quietly. It didn’t. The bank found out from the numbers themselves, and by then the account had crossed into overdue. No room left for an ad hoc facility. What followed was recovery, on the bank’s terms.

Same stress. Same industry. The only real difference was who called first.

This matters more today than a few years ago, and the reason is in the data. Per the Economic Survey tabled in Parliament this year, the recovery rate on bad loans has nearly doubled, from 13.2 percent in FY18 to 26.2 percent in FY25. The slippage ratio, how fast a loan turns bad, has fallen from 7.1 percent to 1.3 percent. Banks are faster at spotting stress and acting on it than ever.

That is good news for the banking system. It is a warning for anyone who assumes silence buys them time. It doesn’t, not anymore.

Banks do lend against the balance sheet, real numbers, real security, real cash flows. But the balance sheet only gets you the sanction. What decides how a bank treats you once that balance sheet is under pressure is something the balance sheet cannot show, whether you are the client who brings them bad news early, or the one they have to go looking for.

Your banker is not your adversary. Your habit of only calling when something has already gone wrong is.