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RBI today withdrew a portion of its earlier statement in which it had said that 12 cases identified by it for insolvency proceedings would be accorded priority by the National Company Law Tribunal (NCLT) “stands deleted”.
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On June 13, RBI had said it has identified 12 accounts for insolvency proceedings with each of them having over Rs 5,000 crore of outstanding loans accounting for 25 per cent of total NPAs of banks.
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It has also said these cases would be “accorded priority” by NCLT, which has jurisdiction over insolvancy proceedings.
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However, withdrawing the portion today, RBI said: “…Such cases will be accorded priority by the National Company Law Tribunal (NCLT).” stands deleted.” the banking regulator said in a statement today.
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It further said: “The remaining contents of the Press Release remain unchanged.”
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The Press Release had “outlined the process followed by the Internal Advisory Committee to identify accounts for reference by banks under the Insolvency and Bankruptcy Code, 2016,” RBI added.
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Yesterday, the finance ministry has asked banks to maintain zero tolerance against bad loans and be prepared to fight cases to resolve large NPAs or non-performing assets although the Gujarat High Court has stayed bankruptcy proceedings against Essar SteelBSE 0.41 %.
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Once a case is referred to NCLT, there is a 180-day timeline to decide on a resolution plan though 90 days can be given in addition. If a plan is not decided, then the company will go into liquidation.
via RBI: NCLT priority for insolvency: RBI partially retracts statement – The Economic Times
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