RBI Tweaks Circular On 12 Big Stressed Accounts
On Gujarat High Court’s direction, RBI drops line urging NCLT to prioritise cases.
The Reserve Bank of India has made changes to its circular which identified twelve large stressed accounts, and had asked the National Company Law Tribunal (NCLT) to accord priority to the resolution of these accounts.
The change was made after the Gujarat High Court questioned the statement made by the RBI as part of its June 13 circular. On Friday, the court asked the RBI to delete the statement from its press release.
The third line of paragraph no. 5 of the Press Release, which reads as follows: 5. ...Such cases will be accorded priority by the National Company Law Tribunal (NCLT). stands deleted.RBI Corrigendum, On July 9
It added that all other contents of the RBI’s press release remain unchanged.
The matter came up as part of a petition filed by Essar Steel, which had recently moved the Gujarat High Court against insolvency proceedings initiated against it by the company’s lead lender, the State Bank of India and foreign lender Standard Chartered Bank, in two separate filings.
The joint lenders forum led by SBI had earlier decided to invoke the Insolvency and Bankruptcy Code (IBC) against Essar Steel at the NCLT. The case was scheduled to be heard by its Ahmedabad bench on July 6. but was put on hold after Essar Steel appealed in the High Court.
In June, an internal advisory committee of the RBI had identified 12 large corporate accounts which represented about 25 percent of the total gross non-performing assets (NPAs) of the banking sector, for immediate action under the IBC.