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The Reserve Bank of India (RBI) has identified 40 large defaulters as the next lot of firms where banks will push for an early resolution, a government official said on condition of anonymity.
Along with the 12 cases where bankruptcy proceedings have already started, these would account for 60-65% of the bad loans clogging the banking system, this person added.
A RBI spokesperson declined to comment.
A speedy resolution of these cases “will keep the banking system running”, the government official said. He added that invoking the Insolvency and Bankruptcy Code won’t be the default option for resolving these accounts and lenders will also look at other mechanisms such as joint lenders’ forums.
Indian banks are sitting on a stressed asset pile of more than Rs10 trillion, of which gross bad loans accounted for Rs8.29 trillion at the end of the June quarter. The rest are restructured loans.
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