This happening in India! Just 12 accounts accountable for 25% of Rs 8 lakh crore bad debt with banks

Without naming the defaulters, the Reserve Bank Of India said the lenders will be asked to initiate insolvency proceedings to recover the dues.
Without naming the defaulters, the Reserve Bank Of India said the lenders will be asked to initiate insolvency proceedings to recover the dues.

Mumbai, June 14: The Reserve Bank Of India identified 12 accounts each having more than Rs 5,000 crore of outstanding loans and accounting for 25 percent of total Non-performing assets (NPAs) of banks for immediate referral for resolution under the bankruptcy law.

Without naming the defaulters, the Reserve Bank Of India said the lenders will be asked to initiate insolvency proceedings to recover the dues.

The banking sector is saddled with non-performing assets (NPAs) worth over Rs 8 lakh crore, of which Rs 6 lakh crore is with public sector banks (PSBs).

The Internal Advisory Committee (IAC), the central bank said, has arrived at an objective, non-discretionary criterion for referring accounts for resolution under the Insolvency and Bankruptcy Code (IBC).

“In particular, the Internal Advisory Committee recommended for Insolvency and Bankruptcy Code reference of all accounts with fund and non-fund based outstanding amount greater than Rs 5,000 crore, with 60 percent or more classified as non-performing by banks as of March 31, 2016,” the Reserve Bank said in a statement.

The Internal Advisory Committee noted that under the recommended criterion, 12 accounts with about 25 percent of the current gross Non-performing assets of the banking system would qualify for immediate reference under IBC, it said.

The Reserve Bank Of India, based on the recommendations of the Internal Advisory Committee, will accordingly be issuing directions to banks to file for insolvency proceedings under the IBC in the identified accounts.

Such cases will be accorded priority by the National Company Law Tribunal (NCLT).

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