The slow burn of bankruptcy filings may be about to end
₹7 trillion worth of bad debt in five years between 2019 and 2023 in the absence of resolution. Joshi said banks will be asked to move NCLT first, even if they are talking to borrowers for a one-time settlement (OTS), which often delays NCLT filings and admission. Also, sometimes bankers do not submit all the required information in their insolvency application, delaying admission.
The Department of Financial Services (DFS) has already directed heads of PSBs to conduct monthly reviews of their top 20 cases awaiting bankruptcy admission. The finance ministry is also planning a review meeting soon, where the progress would be mapped in terms of admission and resolution of bankruptcy cases. The government has already received a report from State Bank of India on its progress on NCLT-bound cases, Joshi said.
In December, the DFS conducted a review meeting with managing directors and chief executives of state-run banks and financial institutions including National Asset Reconstruction Co. Ltd to assess the situation on pending bankruptcy applications and the progress made in large cases. The review had become important given that in several cases, over one year was spent just to get the matter admitted in tribunals, while the resolution process itself stretches far beyond the 360-day timeline.
Read more on livemint.com
