Banks gearing up to refer 24 of 28 large NPA accounts to NCLT
PrintListen to this Article
In August, the Reserve Bank had asked banks to either resolve the 28 more large stressed accounts or refer them to the National Company Law Tribunal (NCLT) by December 31. These accounts together account for 40 per cent of bad loans of around Rs 4 lakh crore.
Some of the large accounts, which are likely to go to the NCLT, include Asian Color Coated Ispat, Castex Technologies, Coastal Projects, East Coast Energy, IVRCL, Orchid Pharma, SEL Manufacturing, Uttam Galva Metallic, Uttam Galva Steel, Visa Steel, Essar Projects, Jai Balaji IndustriesBSE -4.93 %, Monnet Power, Nagarjuna Oil Refinery, Ruchi Soya Industries and Wind World India.
In the case of Anrak Aluminium, the lenders are looking for a one-time settlement, while for Soma Enterprises, the banker said the account is closer to resolution. For Jaiprakash Associates -- its EPC business arm -- the lenders are seeking Reserve Bank approval for a "deep restructuring", another banker said.
The lenders have also sought RBI permission to extend the December 13 deadline for Videocon IndustriesBSE 4.88 %, where they have huge exposure, said another banker.
However, RBI refused to extend the deadline and banks are preparing to approach NCLT. Banks will also have to make a provision of 50 per cent on these accounts by March 2018.
It can be noted that of the 12 largest accounts that the RBI had named on the June list, 11 of them are under the NCLT.
The apex bank's internal advisory committee identified 12 large stressed cases worth over Rs 5,000 crore, accounting to 25 per cent (Rs 1.75 lakh crore) of total gross non-performing assets, for proceedings under the insolvency and bankruptcy code.
The central bank advised banks to set aside 50 per cent provisioning against secured exposure and 100 per cent against unsecured exposure in all cases referred for bankruptcy.
Comments With the closure of RBI s deadline to resolve the 28 identified large stressed accounts in the second list, banks are gearing up to refer as many as 24 of them for insolvency proceedings.
In August, the Reserve Bank had asked banks to either resolve the 28 more large stressed accounts or refer them to the National Company Law Tribunal (NCLT) by December 31. These accounts together account for 40 per cent of bad loans of around Rs 4 lakh crore.
"Except for Anrak Aluminium, Jayaswal Neco IndustriesBSE 3.02 %, Soma Enterprises and Jaiprakash Associates, all other accounts are going to the NCLT (for resolution)," a senior banker said.
Some of the large accounts, which are likely to go to the NCLT, include Asian Color Coated Ispat, Castex Technologies, Coastal Projects, East Coast Energy, IVRCL, Orchid Pharma, SEL Manufacturing, Uttam Galva Metallic, Uttam Galva Steel, Visa Steel, Essar Projects, Jai Balaji IndustriesBSE -4.93 %, Monnet Power, Nagarjuna Oil Refinery, Ruchi Soya Industries and Wind World India.
In the case of Anrak Aluminium, the lenders are looking for a one-time settlement, while for Soma Enterprises, the banker said the account is closer to resolution. For Jaiprakash Associates -- its EPC business arm -- the lenders are seeking Reserve Bank approval for a "deep restructuring", another banker said.
The lenders have also sought RBI permission to extend the December 13 deadline for Videocon IndustriesBSE 4.88 %, where they have huge exposure, said another banker.
However, RBI refused to extend the deadline and banks are preparing to approach NCLT. Banks will also have to make a provision of 50 per cent on these accounts by March 2018.
It can be noted that of the 12 largest accounts that the RBI had named on the June list, 11 of them are under the NCLT.
The apex bank's internal advisory committee identified 12 large stressed cases worth over Rs 5,000 crore, accounting to 25 per cent (Rs 1.75 lakh crore) of total gross non-performing assets, for proceedings under the insolvency and bankruptcy code.
The central bank advised banks to set aside 50 per cent provisioning against secured exposure and 100 per cent against unsecured exposure in all cases referred for bankruptcy. #casansaar (Source - PTI, Economic Times)
Category : NPA | Comments : 0 | Hits : 943
Indian banks have written off loans worth Rs 1.53 lakh crore in 2020-21 to show reduced non-performing assets (NPAs) on their books, calculations based on numbers released by individual banks showed. This is the second-highest amount of loans being written off in a financial year over the last decade after 2018-19's record Rs 2.54 lakh crore write-offs. For one, loans that have been bad for years are dropped from the balance sheet of banks by way of a write-off and corporates compri...
The Supreme Court on Tuesday said the interim relief granted earlier to not declare the accounts of respective borrowers as non-performing assets stands vacated, ending the blanket ban on classification of non-performing assets (NPAs). “However, there shall be no order as to costs,” the order by the top court said. In September last year, the Supreme Court had directed that accounts not declared NPAs as of August 31 should not be classified as such until further orders. This ha...
The Supreme Court Thursday directed that accounts, which were not declared as non-performing asset till August 31 this year, shall not be declared NPA till further orders. A bench headed by Justice Ashok Bhushan said this while hearing a batch of pleas which have raised the issue of interest being charged on instalments which were deferred under moratorium period due to COVID-19 pandemic. The apex court passed the order while noting the submissions of senior lawyer Harish Salve, who appear...
The Finance Ministry has asked the Reserve Bank of India (RBI) to relax asset classification norms for farm loans extended by banks following the stress faced by the agriculture sector. In a letter addressed to RBI Governor Shaktikanta Das, the Ministry said, “it is requested to consider making appropriate relaxation in asset classification norms in respect of short-term agricultural crop loans for a period up to 30th June 2020.” The letter, reviewed by The Hindu, cited a commu...
Public sector banks (PSBs) have recovered close to Rs 1.2 lakh crore from stressed assets during the financial ended March, primarily helped by resolution under the Insolvency and Bankruptcy Code (IBC), an official said. During the first half of the previous fiscal, banks recovered Rs 60,713 crore from bad loans. "Due to non-resolution of some big accounts referred under NCLT (National Company Law Tribunal), PSBs could not achieve the resolution target of Rs 1.80 lakh crore. But, thes...
Comments