Bankers have received from the Reserve Bank of India (RBI) the first list of six stressed accounts that they must resolve via the Insolvency and Bankruptcy Code (IBC), senior executives familiar with the development said. The bankers added that the central bank had asked them to refer the cases to the National Company Law Tribunal (NCLT) within a fortnight.
The companies, with a combined debt of Rs 1.6 lakh crore include Essar Steel, Bhushan Steel, Bhushan Power & Steel, Monnet Ispat, Alok Industries and Electrosteel Steels. On Tuesday, the RBI said it had identified 12 stressed accounts that would need to be resolved via the IBC. These are accounts to which lenders have an exposure of more than Rs 5,000 crore and more than 60% of which have been recognised as NPAs.
With a gross debt of Rs 44,477.93 crore as on March 31, 2016, Bhushan Steel is probably the single largest toxic exposure that banks have on their books.
The RBI has indicated it would shortly come out with changes in provisioning needs for cases referred to the IBC, which may defer immediate provisioning needs.
The extent of the NPA problem can be gauged from the fact that around Rs 10 lakh crore of loans are either non-performing or stressed; this is roughly 12% of total loans. According to Capitaline data, the total bad loans of 37 banks stood at Rs 7.1 lakh crore in FY17, up 25% from last year.