Banks have piled up nearly Rs 1.3 lakh crore of bad loans for sale to asset reconstruction firms (ARC) in the last fiscal, amid delays and legal challenges in cases admitted for resolution in the National Company Law Tribunal (NCLT) under the bankruptcy code.
State Bank of India, Central Bank of India and numerous other banks have decided to sell these assets that would require lesser provisioning and reduce the hassle of long litigation in the NCLT
Hari Hara Mishra, director, UV ARC, said “there was an acceleration in assets put up for sale by banks to the ARCs in March FY19 quarter, among others, in view of protracted litigation in some large cases under IBC and consequent time overrun, the banks wanted to get a clean exit and reduce the NPAs in their books.”
Despite the Insolvency and Bankruptcy Code being in place for more than two years, resolution plans are getting delayed.
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