Banks chart plan for 12 large NPA accounts, Lanco Infra first to be booked

Lenders have been asked to register against these defaulting borrowers in NCLT within a month

economy news| Lenders on Monday began meeting to initiate proceedings against 12 stressed accounts identified by the Reserve Bank to be referred under the Insolvency and Bankruptcy Code (IBC), sources said.

The accounts identified by the RBI include Amtek Auto (Rs 14,074 crore), Bhushan Steel (Rs 44,478 crore), Essar Steel (Rs 37,284 crore) Bhusan Power and Steel (Rs 37,248 crore), Alok Industries (Rs 22,075 crore), Monnet Ispat (Rs 12,115 crore) and Lanco Infra (Rs 44,364.6 crore).

Lanco Infratech, power and road construction firm, became the first among the "dirty dozen" companies to be booked by IDBI Bank.

"Lanco Infratech (LITL)...vide letter dated June 17, 2017, intimated under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, that RBI directed IDBI Bank, the lead bank of LITL to initiate Corporate Insolvency Resolution Process (CIRP) for LITL under the Insolvency and Bankruptcy Code, 2016,” the company said in a filing on Saturday.|Economy policy 

The list also named Electrosteel Steels (Rs 10,273.6 crore), Era Infra (Rs 10,065.4 crore), Jypaee Infratech (Rs 9,635 crore), ABG Shipyard (Rs 6,953 crore) and Jyoti Structures (Rs 5,165 crore) as defaulting borrowers.

According to sources in Finance ministry various banks held meeting today to chart out future course of action regarding some of the accounts identified by RBI.

"In today's meeting, banks met to finalise their action plan for some of the accounts before referring to the National Company Law Tribunal (NCLT)," said a banker.

Bankers met to discuss accounts such as Amtek Auto, Bhushan Steel and Essar Steel, among others, said another banker.

The lenders have been asked to register against these defaulting borrowers in NCLT within a month.

 

Bankers' meet begins today to decide on 12 large defaulters RBI named

These 12 accounts have an exposure of more than Rs 5,000 crore each, with 60% or more bad loans

 

economy news| Bankers are meeting from Monday to finalise their next course of action on six of the 12 bad loan accounts for immediate referral to NCLT after the RBI named the largest defaulters to face bankruptcy proceedings.

The first set of six troubled accounts are Bhushan Steel (Rs 44,478 crore), Essar Steel (Rs 37,284 crore), Bhusan Power and Steel (Rs 37,248 crore), Alok Industries (Rs 22,075 crore), Amtek Auto (Rs 14,074 crore) and Monnet Ispat (Rs 12,115 crore), a banker said.

According to RBI, these 12 accounts owe Rs 2.5 lakh crore to the system, which constitutes around 25 per cent of gross bad loans.

The other accounts named for bankruptcy action, according to bankers, include Lanco Infra (Rs 44,364.6 crore), Electrosteel Steels (Rs 10,273.6 crore), Era Infra (Rs 10,065.4 crore) Jaypee Infratech (Rs 9,635 crore) ABG Shipyard (Rs 6,953 crore) and Jyoti Structures with a defaulted loan of Rs 5,165 crore.

Last week, the RBI's internal advisory committee (IAC) had sent the list of 12 accounts to bankers for immediate reference under the Insolvency and Bankruptcy Code (IBC). These 12 accounts are led by SBI (six of them), PNB, ICICI Bank, Union Bank, IDBI Bank and Corporation Bank, according to bankers.|Latest economy news

"Beginning Monday, banks are meeting to discuss six of the 12 accounts named by the RBI before referring accounts to the National Company Law Tribunal (NCLT) by the end of this month," a banker told PTI.

Since these are large accounts and involve multiple banks, the lenders will try to take a common view on all administrative requirements before referring these accounts to the NCLT.

Another banker said, "they will also decide on the appointment of insolvency professional (IP) who will later decide on the resolution plan and submit it to the lenders for their consideration".

While ABG Shipyard, Amtek Auto, Alok Industries, Bhushan Steel, Bhushan Power and Steel, Electrosteel Steels, Jaypee Infratech, Jyoti Structures and Monnet Ispat and Energy did not respond to e-mails sent to them, Era Infra and Lanco Infra could not be contacted.