State Bank of India official said, “With RBI taking control, the resolution process will be fastened. However, borrowers can still use legal loopholes to delay the process. We hope the corporates and promoters are not given a chance to defer the hearings and sale of their assets. Also, it remains to be seen what decisions the insolvency professionals take.”

Bankers fear there could be hiccups given the National Company Law Tribunal (NCLT) will take up such cases for the first time. The cases under the IBC will be referred to the NCLT which is the arbitration authority to take up the cases.

A time-bound process of 180 days with an extension of 90 days to come up with a resolution plan will require the court to take up the cases on a priority basis.

Kumar Saurabh Singh, Partner at the law firm Khaitan & Co, said, “The Code (IBC) talks about a time bound process in case of a default. Hence the intent is to push the case within 270 days and courts may take cases on a priority basis. But legally the option of a hearing is definitely available to the borrowers and they will try to use it. So, possibility of challenges by promoters or companies on technical grounds could be there.”

He added, even in the existing cases under consideration, there are cases where companies are delaying the process of admission to the NCLT.

Bankers suggest the referred accounts are likely to be from the steel, infrastructure and power sector with the likes of Bhushan Power, Bhushan Steel, Essar, Alok Industry , Lanco,  ABG SHIPYARD and Monnet Ispat among the top 12 companies considered by the RBI’s internal advisory committee (IAC).

Formed by majorly independent directors of RBI, the IAC at its first meeting, recommended all accounts worth at least Rs 5,000 crore, of which 60 percent or more has been classified as non-performing assets (NPAs) by banks as on March 31, 2016, to be referred to the IBC.

With a focus on large stressed accounts, the IAC took up for consideration the accounts which were classified partly or wholly as non-performing from amongst the top 500 exposures in the banking system.

At present, the banking sector is reeling under gross NPAs totaling about Rs 7.7 lakh crore or 9.6 percent of total loans in the sector.

The total stressed loans amounted to Rs 13.64 lakh crore, 17 percent of the total loans in the system, data by a Credit Suisse report said.

Bankers hope the consorted approach by the RBI and government may create a sense of urgency and courts might get more supportive and not allow undue advantage by the corporates.