SC RE­LIEF TO POWER COM­PA­NIES

Financial Chronicle - - FRONT PAGE -

The Supreme Court on Tues­day asked banks to main­tain sta­tus quo and not to ini­ti­ate in­sol­vency pro­ceed­ings against loan de­fault­ing power com­pa­nies.

THE Supreme Court on Tues­day asked banks to main­tain sta­tus quo and not to ini­ti­ate in­sol­vency pro­ceed­ings against loan de­fault­ing power com­pa­nies in the coun­try. A bench, headed by Jus­tice RF Na­ri­man, also asked banks not to file any in­sol­vency cases till Novem­ber when the apex court would hear the mat­ter. It also agreed to trans­fer to it­self 12 cases pend­ing be­fore dif­fer­ent high courts re­lated to this is­sue.

The is­sue pertains to RBI’s re­vised frame­work in­tro­duced on Fe­bru­ary 12 this year, which has pro­vi­sions to de­clare a com­pany bank­rupt even on a one-day over­due. The frame­work pro­vides that lenders have to pro­vide for res­o­lu­tion plan within 180 days in case of large ac­count of Rs 2,000 crore and above.

In its cir­cu­lar, RBI has said that if a res­o­lu­tion was not found by Au­gust 27, NPA ac­counts should be sent to bankruptcy courts. Banks have ex­po­sure of around Rs 1.74 lakh crore to stressed power as­sets.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.