RBI Issues List II for Loan Defaulters for Insolvency Action

Banking News

Business Mantra News

  • For Recovery of NPAs of over Rs.2.00 Lakh Crores, RBI has issued another list of 45-50 defaulting Corporates.
  • This move of cleaning process can put pressure on promoters of defaulting companies to come on the negotiating table for workable solution to the Bad Loans.
  • Even the Banks shall have to make higher provisions for such bad loans to clean up their Balance Sheets.
  • Earlier in June, 2017 RBI had initiated action against 12 Big defaulting corporates where the quantum of Bad Loans was near to Rs.2.5 Lakh Crores.
  • It is a very tough time for the Bankers specially the financial year 2017-18, because the Banks shall have to make 50% of the provisions of the defaulting amount.
  • When a case is referred to National Company Law Tribunal for insolvency proceedings, the Banks are to make a provision of 50% of the defaulting amount.
  • If the workable solution is not found out by the Banks along with the defaulting borrowers within six months, the cases shall have to be referred to Insolvency & Bankruptcy Code (IBC) to initiate the recovery proceedings.
  • 45 to 50 defaulting companies include East Coast Energy, Transstroy India, Videocon Telecom, Visa Steel, Monnet Power, Jaiprakash Associates, Asian Colour, Shakti Bhog, Ushdev International, Nagarjuna Oil Refinary, Unity Infraprojects, Essar Projects, SEL Manufacturing, Soma Enterprises, Jaiswal Neco, Jai Balaji Industries etc.

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