MUMBAI: The National Company Law Appellate Tribunal (NCLAT) on Monday said no financial institution can declare the accounts of Infrastructure Leasing & Financial Services (IL&FS) or its entities as Non-Performing Assets for non-payment of dues without prior permission of the Tribunal.
The order passed by a two-member bench, headed by chairman Justice SJ Mukhopadhaya, was in response to the appeals by some banks and financial institutions in the IL&FS resolution case. This follows a recent order allowing 22 of the IL&FS firms tagged “green” to service their debt obligation.
As per the RBI regulations, any loan where the interest or principal amount remain overdue for a period of more than 90 days as per the terms of the loan has to marked as NPA and appropriate provisioning has to be made for such loans by the banks.
NCLAT had earlier allowed 22 green-category IL&FS group firms, which were in a position to meet their payment obligations, to do so. While this will give reprieve to the banks, it needs to be seen how RBI will deal with non-classification of NPAs as per the NCLAT order.
Out of the 169 domestic IL&FS group entities, stress test was completed for 69 entities, of which 22 are classified Green, 10 as Amber and 38 as Red. Amber, as per the reckoning, can only meet the operational payment obligations and payment obligations to senior secured financial creditors, and Red ones cannot even meet the payment obligations of senior secured financial creditors.
4 IL&FS employees back from ethiopia
Mumbai: IL&FS Transportation Networks Ltd (ITNL), an IL&FS group subsidiary, said in a statement on Monday that it has safely brought back four of its employees who were stuck in Ethopia over unpaid dues. While many of its employees working abroad started returning to India following the crisis that hit the company in September last, the ones in Ethiopia had to go through an ordeal of being held hostage.