JOIN USEnthused by the successful conclusion of the Bhushan Steel case, the Finance Ministry 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.
Last week, Tata Group acquired a controlling stake of 72.65% in the debt-ridden Bhushan Steel for around Rs 36,000 crore will help in cleansing the banking system as well as boost lenders profitability.
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 public sector banks, a senior Finance Ministry official said.
Last June, RBI’s Internal Advisory Committee identified 12 accounts, each having more than Rs 5,000 crore of outstanding loans and accounting for 25% of total NPAs of banks.
Following RBI’s advisory, banks referred Bhushan Steel, Bhushan Power & Steel, Essar Steel, Jaypee Infratech, Lanco Infratech, Monnet Ispat & Energy, Jyoti Structures, Electrosteel Steels, Amtek Auto, Era Infra Engineering, Alok Industries and ABG Shipyard to NCLT.
These accounts together have a total outstanding loan of Rs 1.75 lakh crore.