RBI Rejects Deadline Extension To Resolve Stressed Assets
[ By Bobby Anthony ]The Reserve Bank of India (RBI) has rejected a demand by banks to extend the January 7 deadline to come up with resolution plans under inter-creditor agreements (ICAs) on stressed assets.This would effectively force banks which were working on resolution plans for cases worth Rs 3 lakh crore to approach the National Company Law Tribunal (NCLT).Incidentally, the last date...
ToRead the Full Story, Subscribe to
Access the exclusive LEGAL ERAStories,Editorial and Expert Opinion
The Reserve Bank of India (RBI) has rejected a demand by banks to extend the January 7 deadline to come up with resolution plans under inter-creditor agreements (ICAs) on stressed assets.
This would effectively force banks which were working on resolution plans for cases worth Rs 3 lakh crore to approach the National Company Law Tribunal (NCLT).
Incidentally, the last date to sign ICAs was January 7 for loans exceeding Rs 2,000 crore.
Earlier, banks had asked the RBI to extend the January 7 deadline by three months so that cases close to resolution were not referred to the NCLT.
Banks had written to the RBI that they would make the additional 20% provision but wanted the window of resolution open till the end of the fiscal year
It may be recalled that the RBI’s June 7 circular had required banks to put in place ICAs within a month of the review period in case of stressed assets.
However, a recent survey of 13 banks by the RBI showed that on assets initially assigned to be resolved through the prudential framework, ICAs were yet to be signed for exposures amounting to Rs 33,610 crore.
