The order means financial institutions can initiate proceedings against defaulting companies in the NCLT under the Insolvency and Bankruptcy Code (IBC).
The Allahabad High Court has refused to grant interim relief to power sector defaulters that had appealed for a stay on being dragged to the National Company Law Tribunal.
The order means financial institutions can initiate proceedings against defaulting companies in the NCLT under the Insolvency and Bankruptcy Code (IBC). Power sector companies together owe banks roughly Rs 1 lakh crore.
Close to 60 companies, including power firms, have turned loan defaulters and will have to be taken to the NCLT by lenders after the 180-day grace period granted by the Reserve Bank of India’s February 12 circular ended on August 27.
Currently, bankers are trying to resolve the pile of stressed power assets under the Samadhan scheme working with the power companies.
State Bank of India (SBI) said it is in advanced stages to resolve seven to eight power sector loan accounts worth about Rs 17,000 crore. Bank of India is looking at around 5-7 accounts. Power is one of the highly stressed sectors with close to Rs 1 lakh crore loans having turned sour or been recast.