The country’s largest lender State Bank of India has initiated debt recovery proceedings under the Insolvency and Bankruptcy Code against steelmakers Monnet Ispat Ltd. and Electrosteel Steels Ltd. and power distribution company Jyoti Structures Ltd., one banker with direct knowledge of the matter confirmed to BloombergQuint.
The case against Monnet Ispat has been filed at the National Company Law Tribunal (NCLT), Mumbai, another person said on the condition of anonymity. The company’s headquarters are registered in Chhattisgarh.
The three companies were among the 12 identified by the Reserve Bank of India for immediate action under the Insolvency and Bankruptcy Code. Together, the dozen companies contribute a quarter of India's bad debt. The list was sent to some large banks, including State Bank of India (SBI), which called for meetings of Joint Lender Forums.
SBI and the three companies could not be immediately reached for a comment.
The next step will be to appoint an insolvency resolution professional, subject to the approval of the bench, who will oversee the process which could range from revival of the company to liquidation.
Earlier in the day, SBI Chairman Arundhati Bhattarcharya said the lender had already filed insolvency cases against three companies on the RBI’s list and will file proceedings against three others by July 15. She was speaking at the bank’s annual general meeting on Tuesday, her last official AGM as chairman of the bank.