Skip to main content

Lenders want extension of insolvency deadline

Lenders want extension of insolvency deadline
If debt resolution is not finalised by December 13 for the 28 companies, insolvency proceedings will kickoff
The Indian Chamber of Commerce (ICC) has written to RBI Governor Urjit Patel, requesting an extension of the deadline to March 31, 2018.
Since the IBC is a new code and there are more than 300 accounts under the IBC in the NCLT without a resolution so far, banks should get more time for debt resolution outside the IBC to avoid risks of liquidation and plant closure with consequent unemployment, according to the chamber.
“The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017, has also been recently issued on November 23, 2017, which is likely to delay the resolution of exposures above Rs 5,000 crore already under the IBC till April 2018 and it would be prudent to refer further cases to NCLT only after there is clarity on resolution of the existing cases,” the ICC letter added.
Based on the recommendations of the Internal Advisory Committee, the RBI had recommended 12 large accounts for immediate resolution under the IBC. Currently, these accounts are going through insolvency.Companies on the second list said right now there was no benchmark for the lenders. “If the resolution of the 12 large accounts happened then, there would have been some kind of a direction for the smaller ones that are on the second list.
Most of the non-binding bids have been extended and may just happen in January so a complete resolution will take place only in end-March or April. So there is no reason why the deadline for NPAs with debt below Rs 5,000 crore can’t be extended,” said the promoter of one of the companies. The government has come up with an Ordinance that practically debars promoters from reacquiring their assets.
Also, with so many issues under litigation, including the Ordinance, lenders don’t want to move ahead without clarity and deal with these cases, the companies say. Lenders, in the mean time, are exploring options like onetime settlements or sale to asset reconstruction companies
“Once the cases are admitted to the NCLT, provisioning requirement will go up substantially,” the head of a public sector bank said. As of now, of the 30 companies, around 10 were prepared to submit resolution proposals, said sources close to the development.

The Business Standard, New Delhi, 11th December 2017

Comments

Popular posts from this blog

Budget: Startup sector gets new Fund of Funds, FM to allocate Rs 10K cr

  The Indian startup sector received a boost with Finance Minister Nirmala Sitharaman announcing the establishment of a new fund of funds (FoF) in the Budget 2025. The minister unveiled a fresh FoF with an expanded scope, allocating Rs 10,000 crore. The initial fund of funds announced by the government with an investment of Rs 10,000 crore successfully catalysed commitments worth Rs 91,000 crore, the minister said.   “The renewal of the Rs 10,000 crore commitment to the Fund of Funds for alternative investment funds (AIFs) is a significant step forward for the Indian startup and investment ecosystem. The initial Rs 10,000 crore commitment catalysed Rs 91,000 crore in investments, and I fully expect this fresh infusion to attract an additional Rs 1 lakh to Rs 1.5 lakh crore in capital,” said Anirudh Damani, managing partner, Artha Venture Funds.   Damani further added that this initiative will provide much-needed growth capital to early-stage startups, further strengthenin...

After RBI rate cut, check latest home loan interest rates of top banks for loans above Rs 75 lakh

  The Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points from 6.50% to 6.25% in its monetary policy review as announced on February 7, 2025. After the RBI repo rate cut, banks such as SBI, Canara Bank, PNB, and Union Bank among others have cut their repo linked lending rates. Most other banks are also expected to cut their lending rates in line with the RBI rate cut. After banks cut their lending rates, their home loan borrowers will have to pay less interest. Normally, when a lender cuts the lending rate, borrowers get two options: Either to go for a reduction in EMIs or reduce the tenure of the loan. The second option will help the borrowers clear their home loan outstanding faster. In case, the borrower goes for reduction in EMI then the lower lending rate of the lender would mean lower Equated Monthly Installment (EMI) for borrowers.   EMI is the amount you will pay on a specific date each month till the loan is repaid in full.A repo rate-linked home ...

GST collections rise 9.9% to exceed Rs 1.96 trillion in March 2025

  Gross GST collection in March grew 9.9 per cent to over Rs 1.96 lakh crore, government data showed on Tuesday. GST revenue from domestic transactions rose 8.8 per cent to Rs 1.49 lakh crore, while revenue from imported goods was higher 13.56 per cent to Rs 46,919 crore. Total refunds during March rose 41 per cent to Rs 19,615 crore. After adjusting refunds, net GST revenue stood at over Rs 1.76 lakh crore in March 2025, a 7.3 per cent growth over the year-ago period.       - Business Standard 02 th March, 2025