RBI Files Plea with NCLAT on Default Payment of IL&FS

On Thursday, the National Company Law Appellate Tribunal (NCLAT) permitted the banks to declare the accounts of Infrastructure Leasing & Financial Services (IL&FS) and its group companies that have defaulted on payments as non-performing assets (NPA).

A bench headed by Chairman Justice SJ Mukhopadhaya lifted the ban on banks to disclose the accounts of the IL&FS and its 300 debt-ridden group entities. However, the appellate panel has also elucidated that although the banks would label the IL&FS accounts as NPAs, they are not permitted to initiate the recovery process and debit money.  

A bench headed by Chairman Justice SJ Mukhopadhaya lifted the ban on banks to disclose the accounts of the IL&FS and its 300 debt-ridden group entities. However, the appellate panel has also elucidated that although the banks would label the IL&FS accounts as NPAs, they are not permitted to initiate the recovery process and debit money.  

The bench has viewed that lenders should not withdraw their support until a substantial resolution is passed in relation to IL&FS and its group companies. Currently, IL&FS Group companies are undergoing the resolution process for a collective debt of over Rs 90,000 crores.

The Reserve Bank of India (RBI) had approached the NCLAT, filing a request to modify the order permitting the banks to label the defaulting accounts of IF&FS as NPAs according to bank regulations. The RBI had claimed that banks had a duty to specify the loans as NPAs in case of payment failure after the delay of 90 days as per the present circular and they could not be spared of their duty. 

Email: [email protected]

Mass Communication and Journalism Graduate. Have always been awestruck with the way things are in the world of sports. Mainly covering the news related to the various events happening in the field of sports.

Leave a Reply

Your email address will not be published. Required fields are marked *