Another defaulters´ list sent to NCLT

Another defaulters´ list sent to NCLT

Banks on Friday from the India´s second on large size corporate the National Company Tribunal (NCLT) for resolution

This was after refused toaproposal from the banks to the rules in this regard for those companies which are close to a resolution.Videocon Industries, Jaiprakash Associates and Jayaswal Neco Industries now among those face NCLT proceedings of their loans

These three were recommended by banks for resolution outside the NCLT process but RBI, as mentioned, negatived this.Under the Insolvency and Bankruptcy Code,adefaulting company´s board of directors are suspended and NCLT appoints an insolvency resolution professional to manage its day to day affairs

The company will then be sold to the highest bidder who takes over the largest portion of the debt.Banks are also expected to write off a substantial portion, up to 70 to 80 per cent, on the dues In its annual report for 2017, Videocon said it owed Rs 20,905 crore to bank

Jaypee´s debt was Rs 25,586 crore and that of Nagpu rbased Jayaswal Neko Rs 4,188 crore.A part from Videocon Industries, its telecom arm, Videocon Telecommunications, with debt of Rs 3,000 crore, will also be sent to the NCLT.Banks will have to make 50 per cent provisioning for these loans on their balance sheet

The Jaypee group´s realty arm, Jaiprakash Infratech, is already before the NCLT; its equity has received interest from the JSW group, Adani and Vedanta during the resolution process

The RBI dictat to send all companies on its list to NCLT comes as Reliance Communications announced sale of its wireless assets to Reliance Jio, effective the March 2018 quarter, for Rs 20,000 to Rs 24,000 crore.

Lenders said RCom will be considered a nonperforming asset in the December quarter and they will make provision for its Rs 44,700crore loan, by the RBI rules.On June 2 this year, RCom signeda ´standstill agreement´ with its lender, under which it would not be paying dues till December 2018. The RBI had come out with its first circular on sending companies to NCLT on June 13.

IOB sells Bhushan account to SSG Capital

State owned Indian Overseas Bank(IOB) has sold its Bhushan Steel account with less than 40 percent write off(haircutisthe form all term); SSG Capital has acquired the debt.Sources in IOB say the process should be complete by this weekend. SSG Capital was the largest bidder, with Rs 376 crore.Other bidders, mainly asset reconstruction companies(ARCs), included Edelweiss, JM Financial and Pegasus.

Without disclosing the number, an IOB source said over 60 percent was recovered and this would help to strengthen the balance sheet.The bank´s exposure to Bhushan was Rs 650700 crore.In the recent past, the bank has been in the process of reducing its high levels of nonperforming assets.

In September, it sold bad debt exposure of Rs 1,600 crore in Essar Steel to Edelweiss AR Cata 50 percent discount to the book value. The bank´s gross NPAs at end September were Rs 34,709 crore, about 22.7percent of the total, against Rs 35,453 crore or 23.6percent at end June

Monnet Ispat´s independent director resignsAn independent director of debt laden Monnet Ispat and Energy Ltd, which is undergoing NCLT proceedings, has resigned with immediate effect.Monnet Ispat is one of the 12 companies which the Reserve Bank of India had referred to the National Company Law Tribunal (NCLT) for insolvency proceedings in June this year

The Business Standard, New Delhi, 30th December 2017

Household debt up, but India still lags emerging-market economies: RBI

Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...

External spillovers likely to hit India's financial system: RBI report

While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...

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