Lenders review insolvency process against 12 firms sent to National Company Law Tribunal

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Mumbai | August 08, 2017 5:18 AM

A group of top lenders on Monday met officials from the Indian Banks’ Association (IBA) to review the progress of insolvency proceedings against 12 companies sent to the National Company Law Tribunal (NCLT). Sources said it was attended by State Bank of India (SBI) and Punjab National Bank (PNB), among others. Bankers said the meeting […]

Sources said it was attended by State Bank of India (SBI) and Punjab National Bank (PNB), among others. (Image: Reuters)

A group of top lenders on Monday met officials from the Indian Banks’ Association (IBA) to review the progress of insolvency proceedings against 12 companies sent to the National Company Law Tribunal (NCLT). Sources said it was attended by State Bank of India (SBI) and Punjab National Bank (PNB), among others. Bankers said the meeting was to take stock of the proceedings and discuss the possibilities of recovery and resolution of these accounts. “It was a regular exercise, aiming to review these accounts. We want a proper co-ordination among all parties,” a banker said. Meanwhile, NCLT benches have admitted nine of the 12 companies and appointed interim resolution professionals (IRPs) to manage them. While large defaulters, including Bhushan Steel, Bhushan Power & Steel, Essar Steel and Alok Industries, have been admitted, insolvency applications against Lanco Infratech, Era Infra and Jaypee Infratech are being heard.

The aggregate debt involved in seven stressed companies, now cleared for insolvency proceedings, is Rs 1.7 lakh crore. In June, the RBI had identified 12 companies, which owe lenders Rs 2.4 lakh crore, that banks should refer to the NCLT. Kotak Institutional Equities had said in a report that there was probably no case where a stage of resolution or liquidation has been reached under the code while there were quite a few cases which were referred to upper benches for interpretation of the law.

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