Lenders are using the recently notified insolvency and bankruptcy code to go after the companies which have defaulted in payments.
One such company is Bharati Shipyard, where lenders plan to use the bankruptcy code and file a case with National Companies Law Tribunal (NCLT), according to sources. They may appoint E&Y as resolution professional, sources told CNBC-TV18.
Bharti Shipyard has a debt of Rs 10,000 crore and the lenders are Life Insurance Company and IDBI Bank.
Bankruptcy code has also been invoked against Murli Industries and Falcon Tyres to recover debt with Deloitte as the resolution professional, sources add.
Murli Industries has a debt of Rs 1,500 crore and its lenders are Bank of Baroda and Bank of India. Falcon Tyres has Rs 1,600 crore of debt in its books with State Bank of India as the main lender.
Bharti Shipyard, Falcon Tyres and Murli Industries are yet o reply to CNBC-TV18’s query.
The Insolvency and Bankruptcy Code, 2016 seeks to frame a single law for bankruptcy in India and outlines the resolution process for individuals, creditors and lenders. The insolvency process for companies has to be completed in 180 days, which can be extended for 90 days.
The Indian banking system has bad loans worth Rs 7 lakh crore, as on December 31, 2016. Since January, around 14 insolvency cases have been filed with NCLT.
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