In February, the Reserve Bank of India (RBI) introduced new rules
and a 180-day timeline for banks
to recast loans once payments are missed, scrapping previous methods that could take an indefinite amount of time.
As reported by Bloomberg
, companies that were delinquent when the norms came into force will run out of time on Monday, after which lenders must start moving to court to admit the cases under the Insolvency and Bankruptcy Code (IBC).
According to the report, about 70 large companies with a debt of approximately Rs 3.6 trillion risked being taken to bankruptcy court following the RBI’s February directive, Ashish Gupta and Kush Shah, Mumbai-based analysts at Credit Suisse Group AG wrote in a June report. Further, in June, Credit Suisse had estimated that about 40 power projects were among companies at risk.
To prevent lenders from initiating insolvency proceedings against them, power producers had approached the Allahabad High Court.
The banking regulator has also requested the Supreme Court to club all appeals in various high courts that challenge the RBI's February 12 circular.