The National Company Law Appellate Tribunal (NCLAT) has ruled that the debt of Infrastructure Leasing & Financial Services (IL&FS) and its group entities should not be declared non-performing assets by lenders without explicit approval from the appellate tribunal. On the face of it, the NCLAT ruling passed last week will provide relief to both IL&FS and the banks that are reeling from huge non-performing assets. The NCLAT ruling implies a status quo that will help the lenders to avoid classifying loans of around Rs 53,000 crore as NPAs, helping them to avoid provisioning, at least for the time being. But the NCLAT should have thought through the issue before passing such an order.
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First Published: Mon, March 04 2019. 00:24 IST