RBI gets tough on bad loans

New Delhi, June 22

The RBI has asked banks to resolve 55 high value cases of bad loans within six months or face the prospect of being directed to go in for the new insolvency resolution mechanism as part of the strategy to rein in unacceptable level of non-performing assets (NPAs).

Earlier this month, RBI identified 12 accounts for insolvency proceedings with each of them having over Rs 5,000 crore of outstanding loans, accounting for 25% of total NPAs of banks.

RBI has asked banks to find solution for 55 identified NPA accounts within six months otherwise the central bank would examine those cases and refer for resolution under the Insolvency and Bankruptcy Code (IBC), official sources said.

RBI is of the view that banks should expedite the NPA resolution process for these cases as soon as possible, the sources said.

In cases where a viable resolution plan is not agreed upon within six months, banks would be asked to file insolvency proceedings against the defaulters under the IBC, the sources added. — PTI

Rs 8 lakh cr of NPAs

• The RBI has asked banks to resolve 55 high-value cases of bad loans within six months or face the prospect of being directed to go in for the new insolvency resolution mechanism
• The banking sector is saddled with NPAs of over Rs 8 lakh crore, of which Rs 6 lakh crore is with public sector banks. The 12 identified cases account for Rs 2 lakh crore of NPAs