NPA problem: RBI identifies 12 mega defaulters for insolvency

Financial News :

The Reserve Bank of India (RBI) on Tuesday said its internal advisory committee (IAC) had identified 12 accounts that covered about 25 per cent of the banking system’s non-performing assets for immediate resolution under the Insolvency and Bankruptcy Code.

The gross bad debt of the Indian banking system as of March was at Rs 7.11 lakh crore, which means the 12 accounts would be responsible for about Rs 1.78 lakh crore.

The central bank did not give the names of the borrowers.

The government has amended the RBI Act, giving powers to the central bank to direct banks to take punitive action against individual accounts under the Code. Earlier the central bank could give directions only on an industry basis.

The process of appointing a professional to take over the management of a company and then come out with a solution to repay loans will take a long time and may not be a workable solution, say corporate lawyers.