Two-Year Progress Report Of The 12 Large NPAs Under IBC
(Source: BloombergQuint)

Two-Year Progress Report Of The 12 Large NPAs Under IBC

It’s been two years since the Reserve Bank of India released its first list of accounts for immediate insolvency action.

The list, comprising 12 cases, were among the largest non-performing assets on bank books and contributed to about a quarter of cumulative gross NPAs of the banking system. While the insolvency and bankruptcy code mandates a maximum of 270 days to resolve an account, only three out of the 12 corporate accounts have been resolved till date.

A Mixed Bag

Bhushan Steel Ltd., Electrosteel Steels Ltd. and Monnet Ispat & Energy Ltd. were resolved under the code and the lenders involved recovered a portion of their dues. ABG Shipyard Ltd. and Lanco Infratech Ltd. have already been served liquidation orders and their assets are being sold to recover the value associated with them.

In cases like Essar Steel Ltd., Jyoti Structures Ltd., Bhushan Power & Steel Ltd. and Alok Industries Ltd., there have been considerable delays due to judicial proceedings. And in cases like Jaypee Infratech Ltd., Amtek Auto Ltd. and Era Infra & Engineering Ltd., the courts have had to restart insolvency proceedings since the first round saw lenders either rejecting bidders or final bidders pulling out of proceedings. Further delays are expected in these cases.

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