Banks brace for fresh round of war against NPAs

Last year, as a pandemic struck the economy hard, all proceedings against loan defaulters under the Insolvency and Bankruptcy Code were suspended, initially till September 2020 and later, through two extensions, till March 24, 2021. Now, the insolvency proceedings at the bankruptcy courts will resume with vigour, although the threshold of a default has been raised from Rs 100,000 to Rs 1 crore to protect small businesses, which have not been able to service bank loans in troubled times.

That, however, is only one part of the story that will unfold soon. The Supreme Court lifting the status quo on asset classification has a larger bearing on banks’ balance sheets. Last week, India’s apex court ruled that banks cannot charge