These 12 accounts constitute a total of about 25 per cent of the current gross NPAs of the banking system.
In order to resolve the bad loan crisis, the internal advisory committee (IAC) of Reserve Bank of India (RBI), on Monday, identified 12 defaulters for resolution under the Insolvency and Bankruptcy Code (IBC).
“The IAC, in the meeting, agreed to focus on large stressed accounts at this stage and accordingly took up for consideration the accounts which were classified partly or wholly as non-performing from amongst the top 500 exposures in the banking system,” said RBI.
The committee arrived at an objective, non-discretionary criterion for referring accounts for resolution under IBC.
“In particular, the IAC recommended for IBC reference all accounts with fund and non-fund based outstanding amount greater than Rs 5,000 crore, with 60 per cent or more classified as non-performing by banks as of 31 March 31 2016.
Under the recommended criterion, as per IAC, these 12 accounts constitute a total of about 25 per cent of the current gross NPAs of the banking system.
With regard to the other NPAs which do not qualify under the above criteria, the IAC recommended that banks should finalise a resolution plan within six months.
“In cases where a viable resolution plan is not agreed upon within six months, banks should be required to file for insolvency proceedings under the IBC,” said the central bank.
The Reserve Bank, based on the recommendations of the IAC, will accordingly issue directions to banks to file for insolvency proceedings under the IBC in respect of the identified accounts.
Such cases will be accorded priority by the National Company Law Tribunal (NCLT), RBI said.