New Delhi (IANS) - Insolvency and Bankruptcy Board of India Chairman M.S. Sahoo (pictured) on June 19 said that there is a process which banks need to follow post which the 12 non-performing assets (NPAs) cases would come before the IBBI for resolution.
There is a process that needs to be followed as the banks need their Board approval after which they need to file cases with National Company Law Tribunal (NCLT), which is the adjudicating authority, he said. Reserve Bank of India (RBI) recently identified 12 bad loan accounts which will be resolved through the insolvency route.
The Internal Advisory Committee (IAC) has noted that 12 accounts totaling about 25% of the current gross NPAs of the banking system would qualify for immediate reference under theInsolvency and Bankruptcy Code, 2016. IAC recommended for IBC reference all accounts with fund and non-fund based outstanding amount greater than Rs 5,000 crore, with 60% or more classified as non-performing by banks as of March 31, 2016.
The IAC took up for consideration the accounts which were classified partly or wholly as non-performing from amongst the top 500 exposures in the banking system.
The IAC has been constituted under the Banking Regulation (Amendment) Ordinance, 2017, passed by the government last month that allowed more power to the RBI to tackle the NPAs issue. It has been empowered to issue directions to commercial banks to initiate insolvency proceedings for recovering bad loans.