The State Bank of India and other lenders on Thursday sent accounts of three non-performing companies - Bhushan Steel, Essar Steel and Electrosteel Steels - to the National Company Law Tribunal for further action under the Insolvency and Bankruptcy Code, reported Business Standard. The three companies together have almost Rs 1 lakh crore of bad debt.

Essar Steel, which is unlisted on the stock exchange, had a debt of Rs 37,284 crore, Bhushan Steel’s debt stood at Rs 44,478 crore, and Kolkata-based Electrosteel Steels’ debt was at Rs 10,274 crore at the end of 2015-16. The financial data of these companies for 2016-17 is not yet available, but banks say the debt is bound to have increased over the last year.

The Reserve Bank of India had earlier created a shortlist of firms based on the 2015-16 position of their debts. While the steel sector has improved over the last one year because of an increase in steel prices and imposition of duty on cheap Chinese imports, this was not enough to reduce the bad debts of these three companies.

“Some steel companies did manage to pay the interest component [of the loan due], but not the principal part of the loan. For that steel prices would need to go higher,” a banker, who did not want to be named, told Business Standard. Only an increase in demand from construction and infrastructure sectors would further raise the prices of steel, he added.

Meanwhile, an SBI official said that SBI Capital Markets, a subsidiary of the bank, is already working on financial restructuring plans for some ailing steel companies. These plans would reduce the time taken for finalising a package to resolve the debts of the steel firms, the official said.

The RBI had on June 13 identified 12 non-performing accounts, which account for about 25% of the country’s total bad loans, and said they must now undergo bankruptcy proceedings.