ROLE OF NCLT IN NPA RESOLUTION IN INDIA

It indicates that in 50 per cent cases resolution interest is shown by the borrower itself which depicts their endeavour to protect the company going into liquidation. The resolution process could not fetch encouraging value as lenders face a substantial haircut in times of settlement of stressed assets. The exposure of steel, power and engineering, project &construction sector is highest in the RBI’s big defaulters list referred to NCLT.

A noteworthy point is that the operational creditors have been the most influential in the instigation of insolvency proceedings. However, one year after RBI’s decision to refer 12 big defaulters to NCLT-1, only two cases – Bhusan Steel and Electrosteel have been resolved. The slow resolution process is ascribed to lack of interest in bidding in certain sectors e.g. power and promoters’ intention of delaying the settlement process through litigation.