Amidst mounting bad loans, the FSDC sub-committee headed by RBI Governor Urjit Patel today reviewed the insolvency resolution process under the Insolvency and Bankruptcy Code (IBC), the Reserve Bank said.
Besides, the Financial Stability and Development Council-sub committee also reviewed major developments on the global and domestic fronts that impinge on the financial stability of the country, the RBI said in a statement.
The meeting comes a day after the US Federal Reserve raised the benchmark lending rate to a range of 1.75-2.0 per cent. The second increase of the year, and signalled two more hikes were coming in 2018 and four in 2019, a possible sign of concern about accelerating inflation.
"Further, the Sub-Committee reviewed the status of Corporate Insolvency Resolution Process, functioning of State Level Coordination Committee (SLCCs) in various States/ Union Territories (UTs) and activities of its various Technical Groups," it said.
It is to be noted that IBC came into effect in 2016. Following this, 12 top stressed accounts with NPA over Rs 5,000 crore were identified by RBI for NCLT proceedings.
Banks, accordingly, referred Bhushan Steel Ltd, Bhushan Power & Steel Ltd, Essar Steel Ltd, Jaypee Infratech Ltd, Lanco Infratech Ltd, Monnet Ispat & Energy Ltd, Jyoti Structures Ltd, Electrosteel Steels Ltd, Amtek Auto Ltd, Era Infra Engineering Ltd, Alok Industries Ltd and ABG Shipyard Ltd to NCLT. These accounts together have total outstanding loan of Rs 1.75 lakh crore.
RBI further said the sub-committee discussed issues related to framework for Systemically Important Financial Institutions (SIFI), Common Stewardship Code for financial sector, single entity undertaking multiple activities and status of Central KYC Registry (CKYCR).
The other issues like Investor Education and Protection Fund (IEPF), action taken against Shell companies, legal framework for cross border insolvency and issues regarding acceptance of deposits under Companies Act were discussed in the meeting.
The meeting was attended by Injeti Srinivas, Secretary, Ministry of Corporate Affairs, Ajay Tyagi, Chairman, Securities and Exchange Board of India (SEBI), S. C. Khuntia, Chairman, Insurance Regulatory and Development Authority of India (IRDAI), M S Sahoo, Chairperson, Insolvency and Bankruptcy Board of India (IBBI).
Besides, Deputy Governors of the Reserve Bank - N S Vishwanathan, Viral V Acharya and B P Kanungo, C S Mohapatra, Secretary, Financial Stability and Development Council and Deepak Mohanty, Executive Director of the Reserve Bank also attended the meeting.
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