'Essar, Bhushan Steel among 12 defaulters on insolvency list'

New Delhi: Essar Steel, Bhushan Steel, ABG Shipyard, Electrosteel and Alok Industries are among the 12 borrowers referred by the RBI for insolvency proceedings, a senior public sector banker said today.

Banks will move for insolvency proceedings in these 12 cases after due process defined under the Insolvency and Bankruptcy Code (IBC), the banker added.

When reached out for comment, Essar Steel spokesperson said, "We are not aware of any such development."

There was no reply to queries sent to other companies. The Code has defined time-frame for the resolution, the banker said, adding that 14-day time period has been given for admission or rejection of a case.

After a case is accepted by the National Company Law Tribunal (NCLT), the creditor would get 30 days to hire insolvency practitioners and then the entire process to be completed in 180 days which will look at various possibility including revival of the project and selling to other promoter, the banker said.

Earlier in the day, RBI Deputy Governor S S Mundra said Internal Advisory Committee (IAC), comprising a majority of its independent board members, will come out with the names of 12 defaulters at an appropriate time.

Earlier this week, the RBI identified 12 accounts for insolvency proceedings with each of them having over Rs 5,000 crore of outstanding loans, accounting for 25 per cent of total NPAs of banks.

These 12 accounts would qualify for immediate reference under the Insolvency and Bankruptcy Code (IBC), the RBI said. The banking sector is saddled with non-performing assets (NPAs) of over Rs 8 lakh crore, of which Rs 6 lakh crore is with public sector banks (PSBs).

The Reserve Bank had set up an IAC to advise it with regard to the cases that may be considered for reference for resolution under the IBC.

The IAC, the apex bank said, arrived at an objective, non-discretionary criterion for referring accounts for resolution under the IBC.

In particular, the IAC recommended for IBC reference of all accounts with fund and non-fund based outstanding amount greater than Rs 5,000 crore, with 60 per cent or more classified as non-performing by banks as of March 31, 2016.