12 companies including Essar Steel, Bhushan Steel among defaulters list

New Delhi: According to a senior banker from a public sector RBI has referred 12 companies that fall under defaulters and are liable for Banks insolvency proceedings.

The banker added out of these 12 companies, Essar Steel, Bhushan Steel, ABG Shipyard, Electrosteel and Alok Industries are among the mentioned defaulters list and that Bank will move against these 12 companies after the due process is defined under the Insolvency and Bankruptcy Code (IBC).

No other company responded to queries while Essar Steel spokesperson said, “We are not aware of any such development.”

Earlier this week, RBI has identified 12 defaulters which are liable for insolvency proceedings with each outstanding loans over Rs 5,000 crore and that accounts for 25% of total NPAs of bank which also mentioned it would be constituting an advisory committee comprising majorly of independent board members called the Internal Advisory Committee (IAC) to advise on resolution of these 12 cases under IBC.

These 12 accounts would qualify for immediate reference under the Insolvency and Bankruptcy Code (IBC), the RBI said.
Following which, S S Mundra deputy governor of RBI said the bank will soon come out with names of 12 defaulters after it has been discussed with the IAC and these 12 cases will be accorded priority by the National Company Law Tribunal (NCLT).

The senior banker said this Code has defined time-frame for the resolution and that a time period 14days will be given for admission or rejection of a case.

He added once a case is accepted by the National Company Law Tribunal (NCLT), the creditor will have a 30 day time period to hire insolvency practitioners followed by further proceedings which would include the revival of the project and selling to the other promoter, the proceedings are concluded within 180 days.

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).

According to RBI the IAC arrived at an objective, non-discretionary criterion for referring of defaulters accounts for resolution under the IBC, Hindustan Times reported.