SC to begin hearing on RBI's circular on insolvency proceedings

The Supreme court on Friday said it would commence from November 28 hearing on a batch of petitions contesting February 12 2018 Reserve Bank of India s circular spelling revised framework for initiation of insolvency proceedings against defaulting companies without any delayThe bench of Justice Rohinton Fali Nariman and Justice Navin Sinha said the hearing on a batch of petitions by companies belonging to power sugar textile IT Shipping and other sectors would commence on November 28The top court had on September 11 asked the banks to maintain status quo and hold their hands from initiating any insolvency proceedings under the revised RBI frameworkAsking all the parties to complete their paper work before the final hearing on November 28 Justice Nariman said they will not entertain any plea for adjournmentsThe RBI had brought the revised framework for speedy resolution of nonperforming assets NPAs or bad loans by harmonising existing guidelines with the norms specified in the Insolvency and Bankruptcy Code IBC 2016Under the revised framework banks were required to identify initial stress in loan accounts immediately on default by classifying stressed assets as special mentionA accounts SMA depending upon the period of defaultThe central bank had said that all lenders would be required to put in place Boardapproved policies for resolution of stressed assets including timelines for resolutionAs soon as there is a default in the borrower entitys account with any lender all lenders singly or jointly shall initiate steps to cure the default the notification had saidOn the implementation of the resolution plan the RBI had said The resolution plan RP may involve any actionsplansreorganisation including but not limited to regularisation of the account by payment of all over dues by the borrower entity sale of the exposures to other entitiesinvestors change in ownership or restructuringThe revised guidelines had also laid down the timelines for resolution of stressed assetsIf a resolution plan in respect of large accounts is not implemented as per the timelines specified lenders were required to file insolvency applications singly or jointly under the IBC within 15 days from the expiry of the specified timeline said the revised frameworkBesides all lenders were required to submit a Central Repository of Information on Large Credits CRILC on all borrower entities in default with aggregate exposure of Rs 5 crore and aboveThe notification had said all accounts including those where any of the schemes have been invoked but not yet implemented would be governed by the revised frameworkCatch up on all the latest Crime National International and Hatke news here Also download the new midday Android and iOS apps to get latest updatesThis story has been sourced from a third party syndicated feed agencies Except for the change in the headline the story has been provided ASIS AS AVAILABLE without any verification or editing from our side Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever