The Finance Ministry, following the successful conclusion of Bhushan Steel case, expects banks to write back more than Rs 1 lakh crore after the resolution of all 12 NPA cases referred to insolvency proceedings by the RBI in its first list, media reports said.
Last week, Tata Group acquired controlling stake of 72.65 percent in the debt-ridden Bhushan Steel Ltd for around Rs 36,000 crore. This will help in cleansing the banking system as well as boost lenders profitability, reported PTI.
The remaining 11 NPA cases which are in the pipeline will easily bring to the table over Rs 1 lakh crore and the amount coming from resolution under the Insolvency and Bankruptcy Code (IBC) will directly add to the bottom line and help in reduction of NPAs of the public sector banks, a senior Finance Ministry official was quoted as saying.
Last year in June, RBI’s internal advisory committee (IAC) identified 12 accounts, each having more than Rs 5,000 crore of outstanding loans and accounting for 25 per cent of total NPAs of banks, the report highlighted.
Following the RBI’s advisory, banks referred Bhushan Steel Ltd, Bhushan Power & Steel Ltd, Essar Steel Ltd, Jaypee Infratech Ltd, Lanco Infratech Ltd, Monnet Ispat & Energy Ltd, Jyoti Structures Ltd, Electrosteel Steels Ltd, Amtek Auto Ltd, Era Infra Engineering Ltd, Alok Industries Ltd and ABG Shipyard Ltd to NCLT. These accounts together have total outstanding loan of Rs 1.75 lakh crore, the PTI report said.
The Kolkata Bench of the National Company Law Tribunal (NCLT) has already approved Vedanta Resources’s resolution plan for acquisition of Electrosteel Steels last month, the report pointed out.
