SabKuch Legal
  Legal Masla Koi Bhi Ho Hal Milega Online

#legalupdate: More Cases To Be Referred To NCLT By Lenders

2019-11-29

NCLT is set to receive a huge chunk of resolution plans in early January as banks scramble to come up with a plan for loans worth Rs 3 lakh crore under the June 7 circular.

Under the new RBI rule –

  • Lenders need to come up with a plan by January 7, failing which they would be required to make 20% provisions or refer the cases to court under IBC within 30 days.
  • The lenders are bound to enter into an inter-creditor agreement (ICA), to implement a resolution plan.
  • If the resolution plan is not implemented in a time-bound manner, the provisioning on such accounts can increase up to 50% in a period of 4-5 quarters from the account turning special mention account.

The cases are referred to IBC by the lenders based on the viability and depending on the extent of haircut the bank can take.

By the first week of January, creditors have to enter into an inter-creditor agreement and the resolution plan and will have to implement it within 180 days of the end of the review period.

© Sabkuch Legal Pvt. Ltd. All Rights Reserved.