As soon as the insolvency process and bankruptcy process have been initiated certain companies have participated in the trials by the National Company Law Tribunal, the company court. The participants include Jyoti Structures, Monnet Ispat and Energy and Alok Industries
MCR World – July 22, 2017 – During the process of recovering loans under Insolvency might not reduce the debt on the balance sheet of certain public sector banks. Bankers were expecting to reduce the debt y large numbers but now they have the expectation of less than 50 % recovery of the loans.
When the insolvency and bankruptcy process was initiated, three major companies claimed to be a part of trials by the National Company Law Tribunal, the company court.
A month after the insolvency process and bankruptcy process have been initiated certain companies have participated in the trials by the National Company Law Tribunal, the company court. The Participants Include Jyoti Structures, Monnet Ispat and Energy and Alok Industries
A senior executive of State Bank of India stated that the process of insolvency has authorized us to take decisions. But the real results of the test are yet to come. According to senior executive, he had no expectation of recovering many loans as large numbers of loans are non-performing assets from more than 2 to 3 months. However, in some cases, the recovery of approximately 50 percent was expected but in cases like EPC companies, the situation is not favorable.
In the previous month, the Reserve Bank of India recognized these companies. Some of them are Essar Steel, Bhushan Steel and Electrosteel Steels and Amtek Auto. These companies were to be filed under the Insolvency and Bankruptcy Code immediately.
The Joint Managing Director of Kotak Mahindra Bank, Dipak Gupta informed that he is expecting a lot from the process. The process would allow more definite decision-makings.
According to the analysis of the Crisil Rating Agency, lenders might have to overlook 60 percent of outstanding dues.
The approximate value of bad loans is Rs 4 lakh crore over the universe.
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