In a major crackdown, The Reserve Bank of India had identified 12 accounts of corporate borrowers who owe over Rs 5,000 crore each, according to Indian Express report. It has been learned that Internal Advisory Committee (IAC) of the RBI had identified these accounts for insolvency proceedings under the Insolvency and Bankruptcy Code 2016 (IBC), the report says. Notably, the banking sector is coping with non-performing assets (NPAs) of over Rs 8 lakh crore, of which Rs 6 lakh crore is with public sector banks (PSBs). The RBI had said that 12 accounts adding up to about 25 per cent of the current gross NPAs of the banking system would qualify for immediate reference under IBC. The names of the defaulters were not know as the central bank did not reveal the information in this regard. This came a day after Union Finance Minister Arun Jaitley had reviewed the performance of state-owned banks on Monday.
It has been learned that with total NPAs or bad loans of banks now close to Rs 700,000 crore, the money of banks stuck in these 12 accounts is estimated to be around Rs 175,000 crore. “The IAC also arrived at an objective, non-discretionary criterion for referring accounts for resolution under IBC,” the RBI said, as per Indian Express report.
The RBI also said the details of the resolution framework with regard to other non-performing accounts will be released in the coming days. Last month, the Reserve Bank had outlined the steps taken and those on the anvil pursuant to the promulgation of the Banking Regulation (Amendment) Ordinance, 2017.
According to report, the RBI will ask banks concerned to file for insolvency proceedings under the IBC in respect of the identified accounts. National Company Law Tribunal (NCLT) will look after such cases on priority basis. Once referred to the NCLT, the resolution of the case in terms of either a sell-off of assets or revival or winding up will have to be completed within three months.
The IAC, in the meeting, had agreed to focus on large stressed accounts and accordingly took up for consideration the accounts which were classified partly or wholly as non-performing from amongst the top 500 exposures in the banking system, according to PTI report.