Vijaya Bank has classified Reliance Naval & Engineering, whose auditors had recently expressed doubts about the company's ability to continue as a “going concern”, as a non-performing asset from the March quarter, a senior bank official said.
The company, which was earlier known as Pipavav Defence & Offshore Engineering, was bought over by the Anil Ambani group in 2016, and renamed Reliance Defence & Engineering. It owes over Rs 9,000 to over two dozen banks mostly state-run, led IDBI Bank.
The bank’s action was necessitated by the February 12 changes that the RBI had brought to the NPA resolution framework, which asked banks to consider even one-day delay in payments as default.
“A few accounts, including Reliance Naval, were under various restructuring schemes like the SDR and S4A by lenders. With the February 12 circular, the RBI made it clear that all those accounts where restructuring could not happen by then, have to be treated as NPAs,” a senior official said.