NEW DELHI: The Reserve Bank of India
(RBI) is readying to release a second list of loan defaulters that may contain some 30-40 companies, including the likes of Videocon BSE
-4.49 %, Castex Technologies, Visa SteelBSE -12.28 % and JSPL, ETNow reported.
Most of the companies on the list are said to be from the infrastructure and power sectors. ETNow quoted sources as saying that the second list is likely to be released in September.
Shares of Visa Steel fell 1.24 per cent in Tuesday’s trade to Rs 19.90 after the news. This stock is down 26 per cent in last three months, and 60 per cent in last five years.
Videocon shares fell 3 per cent to Rs 18.35 on Tuesday after having wiped out 60 per cent of its market capitalisation in last three months. In last five years, the stock has lost 90 per cent of its value. Shares of Uttam Galva slipped 0.56 per cent to Rs 26.70 on Tuesday, adding to the 13 per cent decline on the counter in last three months.
Steel stock JSPL declined 2.5 per cent to Rs 132.45 on Tuesday, after having risen 10 per cent in last three months.
The central bank is likely to advise the lenders to haul these companies to the National Company Law Tribunal for bankruptcy proceedings.
When contacted for reaction, JSPL told ETNow: “As a policy, we don’t respond to speculative queries.”
In each case, the debt level varies between Rs 3,000 crore and Rs 50,000 crore. Queries ETNow sent to Uttam Galva and Videocon did not extract any response immediately.
“One should not think that just the first set of companies that have identified alone are the problem. There is problem certainly down the line also,” R Gandhi, Former Deputy Governor, RBI, told.
These companies were definitely put on alert when RBI announced the first list of accounts, which should be taken to IBC. At that time the banks and these accounts should have resolved their cases. Since voluntarily resolution has not been forthcoming, it has to taken for compulsorily through the legal process, Gandhi said.
The second set of references, if it is coming, will send out a clear message to all that you should take this process seriously and if you want to resolve it quickly with voluntary efforts, that is welcome, failing which the authorities will take the necessary action under the law, he added.
In June, an internal advisory committee of the central bank had identified the first batch of 12 accounts of corporate borrowers for insolvency proceedings under the newly-enacted Insolvency and Bankruptcy Code 2016 (IBC).
Each of these companies owed over Rs 5,000 crore with a total involvement of around Rs 1,75,000 crore, accounting for up to 25 per cent of the current gross non-performing assets in the banking system.
Indian banks are burdened with an estimated Rs 8,00,000 crore bad loans, which has virtually crippled the system and drastically slowed down credit flow in the economy.