RBI pushes for bankruptcy proceedings against 12 accounts that make up 25% of India’s bad loans
The central bank did not reveal the names of the holders.
The Reserve Bank of India on Tuesday identified 12 non-performing accounts, which it says account for about 25% of the country’s total bad loans, and said they must now undergo bankruptcy proceedings. Indian banks have non-performing assets of around Rs 10-lakh crore.
The RBI’s International Advisory Committee in its notification did not reveal publicly the holders of the accounts concerned, though The Economic Times speculated that they could belong to companies such as Bhushan Steel, Essar Steel, Lanco, and Alok Textiles. The RBI said that these accounts had outstanding amounts of more than Rs 5,000 crore each, with banks declaring at least 60% of this as non-performing assets as of March 31, 2016.
The accounts identified will now have to file for proceedings under the Insolvency and Bankruptcy Code 2016. The cases will be given priority by the National Company Law Tribunal, the bank’s notification said.
On May 5, the President Pranab Mukherjee had approved an ordinance giving the bank more power to tackle bad loans. Among them was the power to push banks to act against defaulters. Finance Minister Arun Jaitley had on Monday said that 81 cases had been sent to the tribunal during his term.