Beena Parmar Moneycontrol News
Banks yesterday began discussions to chart a course of action for the 12 stressed accounts identified by the Reserve Bank of India.
On Monday, lenders kicked off proceedings to deal with toxic assets to be referred under the Insolvency and Bankruptcy Code (IBC). The accounts discussed include Bhushan Steel, Monnet Ispat and Essar Steel, among others, bankers aware of the development said.
Lanco Infratech, power and road construction firm, became the first among the "dirty dozen" companies to be booked by IDBI Bank.
The public sector bank has initiated action against Lanco Infra on behalf of all lenders in order to recover dues worth over Rs 18,000 crore owed to them. The company's total debt on its books is over Rs 44,000 crore.
Once they file the account in the NCLT, IDBI Bank-led lenders will also appoint an insolvency professional and discuss the resolution plan.
"Lanco Infratech (LITL)...vide letter dated June 17, 2017, intimated under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, that RBI directed IDBI Bank, the lead bank of LITL to initiate Corporate Insolvency Resolution Process (CIRP) for LITL under the Insolvency and Bankruptcy Code, 2016,” the company said in a filing on Saturday.
Last week, RBI-appointed Internal Advisory Committee (IAC), in its first meeting, had recommended 12 accounts totalling about 25 percent of the gross NPAs (non-performing assets) of the banking system for immediate reference under IBC.
These total debt of these accounts is likely to be about Rs 1.9 lakh crore led by lenders such as State Bank of India, Punjab National Bank, ICICI Bank, Union Bank and Corporation Bank.
Bankers say they have started filing cases while an NCLT (National Company Law Tribunal) member, without revealing any names, mentioned that they have started getting more applications from banks now.
Bankers said they will be meeting soon to discuss and arrive at a consensus on all large bad loans accounts and speed up the process to take legal course on RBI's directions.
The banking regulator initially presented a list of six accounts giving banks a fortnight to register the defaulting borrowers with the National Company Law Tribunal (NCLT).
The 6 accounts likely identified by the RBI include Bhushan Steel (Rs 44,478 crore), Essar Steel (Rs 37,284 crore) Bhusan Power and Steel (Rs 37,248 crore), Alok Industries (Rs 22,075 crore), Monnet Ispat (Rs 12,115 crore) and Lanco Infratech (Rs 44,364 crore).
The defaulters list could also include Electrosteel Steels (Rs 10,274 crore), Era Infra (Rs 10,065 crore), Jaypee Infratech (Rs 9,635 crore), ABG Shipyard (Rs 6,953 crore) and Jyoti Structures (Rs 5,165 crore).
Investors of the above indebted companies have taken a hit as the stocks have seen consistent deterioration after the RBI initiated action against their bad loans.
At present, the banking sector is reeling under gross NPAs totaling about Rs 7.7 lakh crore or 9.6 percent of total loans in the sector.
The total stressed loans amounted to Rs 13.64 lakh crore, 17 percent of the total loans in the system, data by a Credit Suisse report said.
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