RBI's second list of loan defaulters includes Videocon, Jaiprakash Associates: report

The Reserve Bank of India recently sent all the commercial banks a second list of at least 26 defaulters and asked them to start the process of debt resolution before initiating bankruptcy proceedings, the Mint reported today.
 
The Central bank wrote a letter in which it said that these accounts should first be resolved through any of RBI's schemes before December 13. In case of non-resolution, cases should be filed against the firms under the Insolvency and Bankruptcy Code at the National Company Law Tribunal before December 31. The NCLT is the adjudicating authority for IBC cases. It was set up on June 1, 2016.
 
According to the report, the defaulters' list comprises companies primarily in the power, telecommunication, steel and infrastructure sectors. The RBI's second list identified those accounts as defaulters where 60 per cent of the outstanding amount was classified as non-performing on the books of banks as of June 30.
 
The Mint also reported that Videocon Industries Ltd and Jaiprakash Associates Ltd were the two large companies among the list of 26 defaulters, accounting for over Rs 1 trillion of debt.
 
Earlier in June, the RBI had identified 12 large loan defaulters who account for 25 per cent of the total NPAs in the banking sector. Essar Steel, Bhushan Steel, ABG Shipyard, Electrosteel and Alok Industries were some of the big companies that were among the 12 borrowers referred by the RBI for insolvency proceedings.
 
These companies were identified by an Internal Advisory Committee or IAC which was set up by the RBI.  The IAC was set up to advise the Central bank with regard to the cases that may be considered for reference for resolution under the IBC.

The IAC recommended for IBC reference of all accounts with fund and non-fund based outstanding amount greater than Rs 5,000 crore or with 60 per cent or more classified as non-performing as of March 31, 2016. It was reported that each of the defaulters identified by the RBI owed over Rs 5,000 crore to banks.