RBI asks NCLAT to mark IL&FS accounts as NPA after default of 90 days

New Delhi, Apr 17 (KNN) The Reserve Bank of India (RBI) has told the National Company Law Appellate Tribunal (NCLAT) that banks had an obligation to mark bad loans as non-performing asset (NPA) after the default of 90 days.

RBI also said that the lenders could not be relieved of the same.

The banking sector regulator has moved the NCLAT seeking a modification of its February 25 order in which the appellate tribunal had said that accounts of the Infrastructure Leasing and Financial Services (IL&FS) and its subsidiaries could not be classified NPAs without approval.

The outstanding loan of the IL&FS group is about Rs 60,000 crore, while debt is over Rs 91,000 crore.

Hearing a plea moved by lenders, the Bench observed that the step was being taken in the interests of the resolution plan being carried out by the new board of the IL&FS.

On February 11, the central government and the new board of the IL&FS had submitted an affidavit detailing three categories — green, amber, and red.

Sixty-nine firms of the group have been classified under these categories based on their ability to service routine debt obligations. Companies with no cash and not in a position to pay any creditor were classified red.

Moreover, the NCLAT has so far allowed green firms to service debt obligations. (KNN/JM)