The RBI headquarters in Mumbai. (GettyImages)
The RBI headquarters in Mumbai. (GettyImages) 
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NPAs Clean-Up: RBI Refuses To Extend Deadline For Second List Of Defaulters

BySwarajya Staff

The Reserve Bank of India (RBI) has rejected pleas from banks seeking an extension of the deadline for restructuring the debt of companies on a second list of bad loan accounts that it had issued in August, said a report in the Economic Times.

This would effectively begin bankruptcy proceedings at the National Company Law Tribunal (NCLT) by 31 December for companies such as Videocon Industries, Jaiprakash Associates, Uttam Galva Steel, Essar Projects, Jaiswal Neco and Asian Colour Coated.

The lenders to the 28 defaulting companies were given a deadline until 13 of this month to draw up a resolution plan in accordance with a formula prescribed by the RBI, failing which, the companies had to be referred to the NCLT.

However, resolution plans were drawn up for some of the companies on the list by the deadline. These include Soma Enterprises under the Scheme for Sustainable Structuring of Stressed Assets (S4A) and a one-time settlement in the case of Anrak Aluminium.

Lenders are set to inform RBI that restructuring of BILT and Jaiprakash Associates has already been completed, said people aware of the matter.

The companies likely headed to NCLT are Asian Colour Coated, Jai Balaji, Jaiswal Neco, Visa Steel, Videocon Telecom, Essar Projects and Monnet Power.

Of the companies on the second list, lenders have already referred 10 companies to NCLT. They include Nagarjuna Oil Refinery, Uttam Galva Metaliks, IVRCL, SEL Manufacturing, Castex Technologies, Orchid Pharma, Ruchi Soya, Ushdev International, Coastal Paper and Unity Infraprojects.

The central bank also stood by its other stipulations, which included the process related to restructuring outside the bankruptcy court, in its letter to lenders on Wednesday. RBI said those accounts that were not recast as per rules stipulated in August will have to enter the insolvency process, said two senior bank officials who did not want to be named.