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Last Updated : Dec 13, 2019 03:28 PM IST | Source: Moneycontrol.com

Nifty Bank marches toward record high on likely resolution of 4 NPA cases in December

According to sources, Essar Steel and Ruchi Soya's resolution is likely to be completed on December 16 while Bhushan Power resolution is likely by the end of December.

 
 
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PSU banks were among top gainers on December 13 after media reports suggested banks are likely to get payments from Essar Steel resolution this month.

The Nifty PSU Bank index rallied 3.66 percent to 2,561.60 and Nifty Bank traded above the psychological 32,000-mark, rising over a percent at the time of publishing this copy.

Union Bank, OBC, Canara Bank, Syndicate Bank, Bank of India, IDBI Bank, Punjab National Bank, Bank of Baroda, Axis Bank, Yes Bank, SBI, RBL Bank, IndusInd Bank, Federal Bank and IDFC First Bank gained 1-7 percent while UCO Bank rallied 12 percent and Corporation Bank gained 13 percent. ICICI Bank was up 0.85 percent.

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"Almost two years after lenders sent Essar Steel to insolvency court, the end may be in sight. The resolution may be completed on December 16. Ruchi Soya and Bhushan Power cases may also be resolved by the year-end," CNBC-TV18 said quoting sources.

According to sources, Essar Steel and Ruchi Soya's resolution is likely to be completed on December 16 while Bhushan Power resolution is likely by the end of December.

It is positive for lenders like SBI, Canara Bank, PNB, IDBI Bank, ICICI Bank etc which have exposure to these cases.

The Union Cabinet on December 11 approved changes to the insolvency law, including a provision to ring-fence successful resolution applicants from criminal proceedings with regard to offences committed by previous promoters of a company.

The amendments to the Insolvency and Bankruptcy Code (IBC) are aimed at removing certain difficulties being faced during insolvency resolution process to realise the objects of the Code and to further ease doing of business, an official release said.

Furthermore, last month the Supreme Court of India had paved the way for ArcelorMittal takeover of Essar Steel for Rs 42,000 crore and set aside the July 4 National Company Law Appellate Tribunal (NCLAT) order giving equal status to financial creditors and operational creditors.

The court had said the resolution of Essar Steel would happen as per the proposed resolution plan of October 18. The apex court accepted Arcelor Mittal's offer to pay an aggregate of Rs 42,000 crore as an upfront amount to the secured financial creditors of bankrupt Essar Steel, before December 31, 2019.

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First Published on Dec 13, 2019 03:28 pm
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