Fri. Mar 29th, 2024
RBI

Reserve Bank of India seems in no mood to take it easy on the loan defaulters. In the latest development, the central bank has issued instructions to the banks to make a list of as many as 50 defaulters and make a final try to recover dues from them. If failed, RBI has asked the banks to approach bankruptcy court to try and recover the bad loans. The banks have been given a time frame of 3 months to take the suggested steps.

This is the second list issued by RBI after it announced to take on the bad loan defaulters. According to a past statement of RBI, the number of corporate loan defaulters, who are willingly not paying the dues back, has increased to a great extent in the last few years and there is a need to tackle that. In the first list, RBI had issued named of 12 loan defaulters and had asked the banks to register cases against them.

An ET report estimated the total amount in these loans to be over 2 lakh crores and as many as 45-50 companies being on the list. According to the report, the companies who are on the second list of RBI include Videocon Industries, Uttam Galva, Essar Projects and Ruchi Soya, Jaiprakash Associates, Visa Steel, Videocon Telecom, Monnet Power, Orchid Chemicals, SEL Manufacturing, Nagarjuna Oil Refinery, Castex, Jayswal Neco, East Coast Energy, Soma Enterprises, Asian Colour, Unity Infraprojects, Jai Balaji Industries, Shakti Bhog, Ushdev International, East Coast Energy and Transstroy India. These companies are said to be on the list of 60% of the lenders and have been classified as non-performing in the quarter ended June 2017.

The above-mentioned companies owe in the range of 10,000 crores to 44,000 crores with Ruchi Soya owing INR 10,000 crores of the lenders whereas, Videocon Industries owes at least INR 44,000 crores.

According to sources, the banks have been given a deadline till 13th December to try and recover the loans from defaulters. If this deadline is missed, the banks will have rights to move to the court to try legal ways to recover the loans. The order also states that the banks will need to quote 50% of the total loan amount when the case gets to the National Company Law Tribunal (NCLT).

The first list of loan defaulters, which was issued by RBI in June this year, included the likes of ABG Shipyard, Alok Industries, Amtek Auto, Bhushan Power, Bhushan Steel, Electrosteel steel, Era Group, Essar Steel, Jaypee Infratech, Jyothi Structures, Lanco Infratech and Monnet Ispat. According to RBI orders, once a company is referred to NCLT, the board will be dissolved and the powers will be transferred from promoters to a recovery professional.

By Prithviraj Singh Chauhan

Part time journalist, full-time observer. Editor-in-Chief at The Indian Wire. I cover updates related to business and startups.