The Reserve Bank of India (RBI) directing banks to initiate insolvency proceedings against 12 shortlisted companies under the Insolvency and Bankruptcy Code (IBC) that have fund/non fund exposure of above Rs 5,000 crore where 60 percent or more has turned bad is a welcome sign for Indias crisis-ridden banking sector. These accounts account a quarter of the total NPAs of the banking system. If banks manage to recover this chunk, it will give a major boost to the sector.
As for other NPA accounts, which do not qualify under the above criteria, the RBI’s internal committee recommended that banks should finalise a resolution plan within six months. In cases where a viable resolution plan is not agreed upon within six months, banks should be …
Read the full article at: http://www.firstpost.com/business/npa-battle-rbi-shortlisting-12-big-accounts-for-insolvency-is-great-news-for-banks-but-there-are-3-key-challenges-3620767.html
