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RBI identifies 12 A/Cs with 25% of bank NPAs for insolvency

Press Trust of India  |  Mumbai 

The RBI today identified 12 accounts each having more than Rs 5,000 crore of outstanding loans and accounting for 25 per cent of total NPAs of banks for immediate referral for resolution under the bankruptcy

Without naming the defaulters, the Reserve said the lenders will be asked to initiate insolvency proceedings to recover the dues.

The sector is saddled with non-performing assets (NPAs) worth over Rs 8 lakh crore, of which Rs 6 lakh crore is with public sector banks (PSBs).

The Internal Advisory Committee (IAC), the central said, has arrived at an objective, non-discretionary criterion for referring accounts for resolution under the Insolvency and Bankruptcy Code (IBC).

"In particular, the IAC recommended for IBC reference of all accounts with fund and non-fund based outstanding amount greater than Rs 5,000 crore, with 60 per cent or more classified as non-performing by banks as of March 31, 2016," the RBI said in a statement.

The IAC noted that under the recommended criterion, 12 accounts with about 25 per cent of the current gross NPAs of the system would qualify for immediate reference under IBC, it said.

The apex bank, based on the recommendations of the IAC, will accordingly be issuing directions to banks to file for insolvency proceedings under the IBC in the identified accounts.

Such cases will be accorded priority by the National Company Tribunal (NCLT).

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, June 13 2017. 20:48 IST