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‘Wilful defaulters must not buy IBC assets’
Context
- To ensure the success of the bankruptcy process under the Insolvency and Bankruptcy Code (IBC), the Finance Ministry has asked banks to be vigilant to ensure that wilful defaulters are prevented from buying stressed assets
What is the present scenario?
- As many as 12 accounts, each having more than ₹5,000 crore of outstanding loans, and accounting for 25% of total NPAs of banks are under the insolvency and bankruptcy resolution process.
- The total outstanding of these accounts, taken together, is ₹1.75 lakh crore.
- Banks are in the process of taking other large non-performing accounts to the National Company Law Tribunal (NCLT) under the insolvency and bankruptcy code.
- The resolution is crucial to the entire banking sector and therefore banks have been advised to be vigilant so that wilful defaulters do not get benefits of the process.
- Non-performing assets of public sector banks have increased to ₹7.33 lakh crore as of June 2017, from ₹2.78 lakh crore in March 2015.
