THE CHALLENGES

Multiple Whammy For Banks

50 per cent provisioning from profits for bankruptcy referred cases

Provisioning goes up to 100 per cent in liquidation cases

Lack of management bandwidth to handle multiple cases

Lower credit offtake

and higher provisioning eroding capital

Haircuts at NCLT will further impact banks

NCLT’s Dilemma

Bankruptcy cases piling up

Only 10 benches across the country to hear cases

Too many amendments creating confusion

Requests for extension beyond 180 days

Not enough quality resolution professionals or valuers Bidders’ Concerns

Fear of subjectivity

as creditors don’t have a template to decide the best bidders

Defaulting promoters finding a way to come back as bidders

Possibility of future challenges to NCLT orders

Information asymmetry as promoters are privy to much more