Bankers are back to dealing with the problem that worried them the most prior to November 8 — recovery of loans — which had taken a back seat since the demonetisation announcement.

At a recent meeting led by State Bank of India BSE 0.14 %, top bankers decided to send out a strong signal to defaulting companies that they would face stern action if they don’t cooperate with recovery. In case of viable companies, banks are looking at undertaking deep restructuring which would involve longer repayment tenure and even steep hair cut. The lenders also vowed to cooperate in debt recovery, which has been a missing piece in the past despite the regulator pushing for it, and ensure that no single bank stalls the process.

CEOs of large commercial banks met twice in the past fortnight and discussed the top 15 stressed accounts, including those of steels companies such as Bhushan , Essar, Visa and Electro steel, and others like IVRCL BSE 0.48 %, ABG Shipyard BSE 0.17 % and Alok Industries BSE 4.33 %. Bankers discussed the bottlenecks that were preventing successful restructuring of companies in stress.

In fiscal year 2015-16, state-run banks posted a combined loss of Rs 17,993 crore due to loan losses.According to data collected by ETIG, bad loans of all commercial banks doubled from a year earlier to Rs 7 lakh crore in the six months through September 2016.