NEW DELHI: The Supreme Court on Thursday reserved its verdict on the complaints filed before it against the Reserve Bank of India’s (RBI) February 12 circular on bad loans. It has given 10 days for all the petitioners (power, sugar and shipping companies) to provide a written submission in the case.
As per RBI’s notification on ‘Resolution of Stressed Assets - Revised Framework’ on February 12, banks have been asked to classify even one-day delay in debt-servicing as default, formulate a resolution plan within 180 days of default, and if it’s unresolved by the end of 180-day period, refer the case to National Company Law Tribunal under the Insolvency and Bankruptcy Code (IBC).
Bankers have claimed that the revised norms would lead to about `1.75 crore power sector lending into non-performing assets (NPA).
On September 11, the Supreme Court had transferred to itself all the petitions moved by power, sugar and shipping companies against the order in different courts across the country.
The apex court is hearing these petitions by dividing them into three categories. There are some companies that have challenged the validity of the Insolvency and Bankruptcy Code. The second group of companies has challenged the constitutional validity of the RBI’s February 12 circular, and the third group, which consists mostly of power companies, has sought temporary relief from the circular only for themselves.