With an aim to tackle the problem, the Internal Advisory Committee (IAC) of the central bank had arrived at an objective and non-discretionary criterion for referring accounts for resolution under the Insolvency and Bankruptcy Code (IBC).
The sources have told the TV channel that as much as 60 percent of the loans to these companies had turned NPA by June 2016.
Companies in the power, infrastructure, telecom will continue to dominate the list as banks grapple with solutions to resolve the debt. Mint hasn’t seen a copy of the letter.
According to the report, the companies in the list include East Coast Energy, SEL Manufacturing, Shakti Bhog, Nagarjuna Oil, Jai Balaji Industries, Uttam Galva, Monnet Power, Orchid Chemicals, Ruchi Soya, Unity Infra, Videocon, JP Associates, IVRCL, Castex, Jayaswal Neco and Visa Steel.
Mint isn’t naming the remaining 24 defaulters because it couldn’t confirm the names from at least two bankers and couldn’t reach out to them. “We are hopeful some of the larger assets would be resolved before the RBI deadline since lenders are working on specific resolutions”, a senior public sector banker said. These companies accounted for 25% of gross bad loans in the system for immediate bankruptcy proceedings. SBI, Punjab National Bank, Bank of India, IDBI Bank and Bank of Baroda together accounted for 47.4%, amounting to Rs 393,154 crore in the total NPAs as of June-end 2017.
Out of these 12 accounts, nine have already been referred to the NCLT, while Lanco Infra, Jaypee Infratech, and Era Infra are yet to be admitted. The IAC was set up to advise the Central bank with regard to the cases that may be considered for reference for resolution under the IBC.
“Of course, as lenders and borrowers compare their options, they would like to know the difference between the bankruptcy code and other RBI restructuring regimes in terms of asset provisioning for banks. RBI clarity on this comparison would be helpful”, Bishnoi added.