Banks Gearing Up To Refer 24 Of 28 Large NPA Accounts To NCLT

With the closure of RBI's deadline to resolve the 28 identified large stressed accounts in the second list, banks are gearing up to refer as many as 24 of them for insolvency proceedings.

In August, the Reserve Bank had asked banks to either resolve the 28 more large stressed accounts or refer them to the National Company Law Tribunal by Dec. 31. These accounts together account for 40 per cent of bad loans of around Rs 4 lakh crore.

“Except for Anrak Aluminium, Jayaswal Neco Industries, Soma Enterprises and Jaiprakash Associates, all other accounts are going to the NCLT (for resolution)," a senior banker said.

Some of the large accounts, which are likely to go to the NCLT, include:

• Asian Color Coated Ispat
• Castex Technologies
• Coastal Projects
• East Coast Energy
• IVRCL, Orchid Pharma
• SEL Manufacturing
• Uttam Galva Metallic
• Uttam Galva Steel
• Visa Steel, Essar Projects
• Jai Balaji Industries
• Monnet Power
• Nagarjuna Oil Refinery
• Ruchi Soya Industries
• Wind World India

In the case of Anrak Aluminium, the lenders are looking for a one-time settlement, while for Soma Enterprises, the banker said the account is closer to resolution. For Jaiprakash Associates -- its EPC business arm -- the lenders are seeking Reserve Bank approval for a "deep restructuring", another banker said.

Also Read: Banks Set To Refer 23 Of 28 Large Dud Accounts To NCLT Mumbai

The lenders have also sought RBI permission to extend the Dec. 13 deadline for Videocon Industries, where they have huge exposure, said another banker. However, RBI refused to extend the deadline and banks are preparing to approach NCLT.

Banks will also have to make a provision of 50 percent on these accounts by March 2018. It can be noted that of the 12 largest accounts that the RBI had named on the June list, 11 of them are under the NCLT.

The apex bank's internal advisory committee identified 12 large stressed cases worth over Rs 5,000 crore, accounting to 25 percent (Rs 1.75 lakh crore) of total gross non-performing assets, for proceedings under the insolvency and bankruptcy code.

The central bank advised banks to set aside 50 percent provisioning against secured exposure and 100 percent against unsecured exposure in all cases referred for bankruptcy.

Also Read: Key Differences Between The Bill And Ordinance That Amend The Insolvency And Bankruptcy Code