Poor prescription

NCLAT ruling on IL&FS undermines RBI's role

The National Company Law Appellate Tribunal (NCLAT) has ruled that the debt of Infrastructure Leasing & Financial Services (IL&FS) and its group entities should not be declared non-performing assets by lenders without explicit approval from the appellate tribunal. On the face of it, the NCLAT ruling passed last week will provide relief to both IL&FS and the banks that are reeling from huge non-performing assets. The NCLAT ruling implies a status quo that will help the lenders to avoid classifying loans of around Rs 53,000 crore as NPAs, helping them to avoid provisioning, at least for the time being. But