The deadline for banks to resolve 28 large stressed accounts identified by the Reserve Bank of India in its second list of non-performing loans ends today.
Of the 28 accounts, which together account for 40 per cent of the system wide bad loans, 23 of them are set to be hauled to the National Company Law Tribunal.
Once the insolvency proceedings begin, banks will have to refer these large accounts to the NCLT in the next 18 days, that is December 31.
In August, the Reserve Bank had asked banks to either resolve 28 more large stressed accounts by December 13 or refer them to the National Company Law Tribunal (NCLT) by December 31.
“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 told PTI.
Some of the large accounts which are likely to go to the NCLT includes 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 and Wind World India.
While the lenders are looking for a one-time settlement in the case of Anrak Aluminium, the banker said the Soma Enterprises account is closer to resolution.
For Jaiprakash Associates (its EPC business arm), the lenders are seeking Reserve Bank’s approval for a "deep restructuring", another banker said.
Bankers have also requested the RBI to extend the December 13 deadline for Videocon Industries, citing heavy exposure. "If the RBI gives us some extension for Videocon Industries then it is fine, otherwise it will also have to go to NCLT," said the banker.
According to rating agency ICRA, the RBI’s second list has accounts from diverse sectors and a total exposure of about Rs 1.15 lakh crore.
Lenders are pinning hopes on the RBI to extend its December 13 deadline to allow them time to restructure these accounts.
Banks will also have to make a provision of 50 per cent on these accounts by March 2018.