The apex court on Tuesday halted the insolvency proceedings providing interim relief to power companies, textile companies and ship owners. The order holds the Reserve Bank of India’s February 12 mandate and recommends RBI to maintain status quo. It has further shifted all non-performing assets (NPAs) petitions from different high courts to itself. The proceeding was against defaults in textile, shipping, power and sugar sectors.
The Bankers quotation as reported by Economic Times stated that the decision will postpone the process until November 14. They appreciated the interference of supreme court owing to a temporary relief provided to them.
As per February circular, the lenders or bank had to adapt a resolution plan to sort their stressed assets of ₹2,000 crore or above within 180 days. If the bank fails it was suppose to file an insolvency application in the National Company Law Tribunal.
The Supreme Court orders grant some time to the lenders in finishing resolution proceedings for borrowers like Jhabua Power, Prayagraj, KSK Mahanadi, GMR Chattisgarh Energy. Adani Power, JSW Energy , Vendanta Plc have been planning to utilise the opportunity by bidding in stressed power assets.