RBI seeks modification of NCLAT order in IL&FS case

RBI seeks modification of NCLAT order in IL&FS case

1. The Reserve Bank of India has decided to appeal in the National Company Law Appellate Tribunal(NCLAT) to seek a modification of its earlier order.
2. Earlier,NCLAT had restrained banks from declaring accounts of Infrastructure Leasing and Financial Services (IL&FS) and its group companies as non-performing assets (NPA).NPA is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.
3. RBI in its plea has said that there is an overlap of power as RBI is the regulator of banks.On the other hand,NCLAT has said that the central bank cannot restri­ct the appellate tribunal from passing orders in this issue.
4. IL&FS is an infrastructure finance company registered with the Reserve Bank of India as a ‘Systemically Important Non-Deposit Accepting Core Investment Company’.IL&FS has run out of money and,therefore,has been unable to service its repayment obligations which led to a series of defaults on loans,debentures and commercial papers.
5. National Company Law Appellate Tribunal (NCLAT) was constituted under the Companies Act, 2013 for hearing appeals against the orders of (a) National Company Law Tribunal(s) (NCLT) (b)Insolvency and Bankruptcy Board of India and (c)Competition Commission of India (CCI).