RBI asks banks to file for insovency in 12 large NPA accounts

RBI asks banks to file for insolvency in 12 large NPA A/Cs Mumbai, Jun 13 (PTI) Clamping down on bad loans, the RBI on Tuesday identified 12 accounts for insolvency proceedings with each of them having over Rs 5,000 crore of outstanding loans, accounting for 25 per cent of total NPAs (non-performing assets) of banks. The banking sector is saddled with non-performing assets (NPAs) of over Rs 8 lakh crore, of which Rs 6 lakh crore is with public sector banks (PSBs). These 12 accounts would qualify for immediate reference under the Insolvency and Bankruptcy Code (IBC), the RBI said. The central bank, however, did not name the defaulters. The Reserve Bank had set up an Internal Advisory Committee (IAC), comprising a majority of its independent board members, to advise it with regard to the cases that may be considered for reference for resolution under the IBC. The IAC, the apex bank said, arrived at an objective, non-discretionary criterion for referring accounts for resolution under the IBC. In particular, the IAC recommended for IBC reference of all accounts with fund and non-fund based outstanding amount greater than Rs 5,000 crore, with 60 per cent or more classified as non-performing by banks as of March 31, 2016. "The IAC noted that under the recommended criterion, 12 accounts totalling about 25 per cent of the current gross NPAs of the banking system would qualify for immediate reference under IBC," the RBI said.