The Financial Stability and Development Council (FSDC) Sub-Committee headed by the Reserve Bank of India (RBI) Governor Urjit Patel has reviewed the insolvency resolution process under the Insolvency and Bankruptcy Code (IBC), amid mounting stressed loans. It also reviewed major developments on the global and domestic fronts that impinge on the financial stability of the country.
The Sub-Committee has reviewed the status of Corporate Insolvency Resolution Process, functioning of State Level Coordination Committee (SLCCs) in various States/ Union Territories (UTs) and activities of its various Technical Groups. IBC had came into effect in 2016. Following this, 12 top stressed accounts with Non-Performing Asset (NPA) over Rs 5,000 crore were identified by RBI for the National Company Law Tribunal (NCLT) proceedings. Therefore, Banks referred Bhushan Steel, Bhushan Power & Steel, Essar Steel, Jaypee Infratech, Lanco Infratech, Monnet Ispat & Energy, Jyoti Structures, Electrosteel Steels, Amtek Auto, Era Infra Engineering, Alok Industries and ABG Shipyard to NCLT. These accounts together have total outstanding loan of Rs 1.75 lakh crore.
The FSDC Sub-Committee further discussed issues related to framework for Systemically Important Financial Institutions (SIFI), Common Stewardship Code for financial sector, single entity undertaking multiple activities and status of Central KYC Registry (CKYCR). The other issues like Investor Education and Protection Fund (IEPF), action taken against Shell companies, legal framework for cross border insolvency and issues regarding acceptance of deposits under Companies Act were discussed by the committee.
