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FinMin asks banks to prevent defaulters from buying stressed assets

NPAs of public sector banks increased to Rs 7.33 lakh cr by June 2017

Press Trust of India  |  New Delhi 

insolvency, bankruptcy
Illustration by Binay Sinha

To ensure the success of bankruptcy process under the and Bankruptcy Code (IBC), the Ministry has asked to be vigilant to ensure that are prevented from buying same again, official sources said.

As many as 12 accounts each having more than Rs 5,000 crore of outstanding loans and accounting for 25 per cent of total of are being under the and Bankruptcy Code process.

The total outstanding of these accounts taken together is Rs 1.75 lakh crore.

Besides, are in the process of taking other large non-performing assets accounts to the National Company Law Tribunal (NCLT) under the

It has been brought to the notice of the Ministry that some of the are making a bid to buy assets of those cases which have been referred under IBC, a senior official said.

The resolution is crucial to the entire banking sector and therefore have been advised to be vigilant so that do not get benefits of the process, the official said, adding that have to be very conscious of this fact that such defaulters should not find a way to get into the system again.

has defined time-frame for the resolution and there is a 14-day time period for the admission or rejection of a case by the National Company Law Tribunal.

After a case is accepted by NCLT, the creditor would get 30 days to hire practitioners and then the entire process to be completed in 180 days which will look at various possibilities including the revival of projects or liquidation.

The has been equipped with powers to specify one or more authorities to advise for dealing with the problem of which, as per the Ordinance, "have reached unacceptably high levels and urgent measures are required for their resolution".

Non-performing assets of have increased to Rs 7.33 lakh crore as of June 2017, from Rs 2.78 lakh crore in March 2015. 

First Published: Sun, November 19 2017. 14:55 IST
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