IDBI Bank mulls insolvency proceedings against defaulter

IDBI Bank is said to be planning to approach National Company Law Tribunal (NCLT) to recover bad loans worth Rs 100 crore from a company. Under Insolvency and Bankruptcy Code, a bank can file a case in NCLT to recover debt.

An official in the know said, “The IDBI Bank is planning to file for insolvency proceedings against a company to recover Rs 100 crore.” When contacted, IDBI declined to comment, citing silence period before announcement of results. 

Till March-end, of 30 cases admitted in NCLT, seven were by banks. However, none was from a public sector bank (PSB). 

PSB IDBI Bank’s total NPLs are worth Rs 20,949 crore. Under the RBI’s Prompt Corrective Action regime to fix NPLs, IDBI Bank would also have to raise capital level and restrict dividend payout. 

However, this is not the first time a PSB is planning to take the defaulter to NCLT. Punjab National Bank had planned to take 250 defaulters to NCLT.

Insolvency professionals say this is just the beginning. Now many more banks will resort to filing for insolvency proceedings against defaulters to recover dues.