Operational Challenges
Banking Secy Nagaraju chairs meetings to address resolution issues NARCL, NCLT face
This story was originally published at 20:21 IST on 12 December 2024
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NEW DELHI – Department of Financial Services Secretary M. Nagaraju Thursday chaired review meetings to address the key operational challenges and enhance efficiency of resolution mechanisms through the National Asset Reconstruction Co. Ltd. and the National Company Law Tribunal, the finance ministry said in a release. The discussions in one of meetings centred on expediting timelines for resolution of accounts under NARCL. At the meeting, it was announced that NARCL has acquired 22 accounts with an exposure of INR 957.11 billion.
Further, a committee with State Bank of India Chairman C.S. Setty as the chairperson was asked to examine and submit a fresh list of accounts for transfer to NARCL, the finance ministry said. Public sector banks were also advised to closely monitor cases in National Company Law Tribunal, minimise procedural delays, and not to seek adjournments.
Banks have resolved 28 accounts with an exposure of INR 1.28 trillion through other resolution mechanisms, subsequent to the NARCL making the offers. This, the finance ministry said, reflects the indirect impact of NARCL's presence in settling and successfully pursuing recovery through other resolution mechanisms.
The review of cases pending for admission before the National Company Law Tribunal benches focussed on addressing delays in admitting Corporate Insolvency Resolution Process applications and overcoming procedural inefficiencies impacting resolution timelines. A detailed review of the top 20 accounts pending for admission at the National Company Law Tribunal, examining their current status, and outlining necessary actions to expedite proceedings was taken up, according to the release.
"Banks were advised to ensure active monitoring of top 20 cases of banks at the Managing Director level, with all proceedings to be attended by senior officials not below the rank of General Manager. Further, banks were urged to minimise procedural delays and strongly oppose unnecessary adjournments," according to the release.
On the lack of real-time information sharing with financial creditors about applications filed by operational creditors, which often caused coordination challenges, Ministry of Corporate Affairs officials said that a proposed plan is already in place to develop an integrated portal to keep banks informed about all the proceedings, further enhancing transparency and coordination in the resolution process.
The meetings were also attended by senior officials of the Department of Financial Services, the Insolvency and Bankruptcy Board of India, the Ministry of Corporate Affairs, NARCL, India Debt Resolution Co. Ltd. and chief executives of public sector banks. End
Reported by Shubham Rana
Edited by Ashish Shirke
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