Banks can search for freezing extensions in the process of NCLT Mayur Shetty | TNN | Updated: 5, 2021, 10:11 Ist as part of its Covid assistance steps, the government has published on June 25 notice to suspend ... Read More Mumbai: Bankers Worried There Will Be Flood Applications at The National Company Law Tribunal ( NCLT) After suspension of the government from the bankruptcy process ended on March 25 this year. Some cases of resolutions such as retail in the future can slip if the operational creditors begin the bankruptcy process.
The Bankir section felt that the government could use concessions under the amendment and extend the suspension until June 2021. As part of its covid assistance steps, the government has published on June 25 notice to suspend the process of bankruptcy six months. In December, the center extended the suspension of three more months. Original ordinance allows the government to extend the suspension for up to one year. Ordonance states that no application for the initiation of the Corporate Bankruptcy Settlement Process of a corporate debtor must be submitted for each default that arises on or after March 25, 2020. News in Brief Explore Brief $ 1.4 billion Award Arbitrase Cairn: Sitharaman said it was his job to submit The appeal of Finance Minister Union Nirmala Sitharaman on Friday showed the government would appeal against the Arbitration panel that asked India to return $ 1.4 billion to the UK Cairn Energy PLC. When asked about the retrospective decision on Cairn energy, Sitharaman said it was a "duty" to appeal in cases where the sovereign state authority for tax is questionable. Sensex smelled 441 points on concerns of US bond results; Nifty settled under 14,950 the equity index fell for the second consecutive session on Friday because the rise of US Treasury produced amazing investors. BSE Sensex benchmark looted 441 points or 0.87 percent to close at 50,405; While the wider NSE moved 142 points or 0.95 percent lower to settle 14,938. The reason behind the regulation is that the Kuncian is the Force Majeure situation outside the control of the debtor and, even if bankruptcy must begin, there will be no many buyers. According to bankers, because lenders cannot begin the bankruptcy process against those who fail in covid locking, they have no choice but to offer their restructuring once under the pandemic assistance scheme. This window for restructuring small business loans is available until March 31 this year. While many borrowers have been seeking restructuring, banks have not finished the scheme for large borrowers. The challenge for the bank is that the Supreme Court has not governed the petition by borrowers on loan classification as non-performing assets (NPA). The government scheme ruled out assistance to borrowers emphasized before the pandemic. This exception makes it difficult for a revival scheme. At the same time, bankruptcy is also not an option. Bankers feel that if suspension is appointed and operational creditors begin the process of the default companies, some restructuring plans may slip. According to a report by ICICI Securities, the restructured bank portfolio tends to be less than 1%. Moody's rating agency said in a report last month that, at the end of December 2020, five banks were considered to have restructured 0.7-2.6% of their gross loan - lower than expectations. "Given that banks can restructure loans to micro, small and medium enterprises (MSMEs) until the end of March 2021, restructured loans can increase in the next few quarters," Moody's said.
