Indian central bank has claimed that it has identified 12 accounts that covered more than 25% of the banking system’s non-performing assets for immediate resolution under Insolvency and Bankruptcy Code.
Reserve Bank of India’s internal advisory committee (IAC), however, refused to divulge names of the erring borrowers, reports Business Standard.
The gross bad debt of the Indian banking system as of March, 2017 was at Rs 7.11 trillion (US$ 110 billion), which means the 12 accounts would be responsible for about Rs 1.78 trillion (US$ 30 billion).
The government has amended the RBI Act, giving powers to the central bank to direct banks to take punitive action against individual accounts under the bankruptcy code. Earlier, the central bank could give directions only on an industry basis.
The RBI said it would start issuing directions to banks to file for insolvency proceedings under the Code in respect of the accounts identified. “Such cases will be accorded priority by the National Company Law Tribunal,” the RBI statement said.