RBI seeks to steer more companies to bankruptcy court

The Reserve Bank of India (RBI) has asked banks to send at least 20 companies that defaulted on their debts to bankruptcy court if their problems are not resolved by about mid-December, a senior banker with direct knowledge of the matter said on Wednesday.

Reuters was not able to determine the exact list of companies in the list, but the senior banker said he knew of at least 20 companies named, based on information provided to his bank by the RBI. Local media had reported on the list late on Tuesday.

The RBI declined to comment.

The latest list of companies that could be sent to bankruptcy court was drafted after the RBI in June asked banks to take 12 of India’s biggest defaulters to bankruptcy court under new powers given to it.

The RBI in June also had given lenders six months to finalise resolution plans for other non-performing accounts not listed among the initial 12.

The RBI’s efforts come as the country seeks to resolve more than $ 150 billion in stressed assets in Asia’s third-largest economy, that are delaying the private investments needed to boost economic growth.

The banker also said banks had been asked to make adequate provisions for the loans to companies in the latest list in line with the central bank’s earlier directive.

Reporting by Devidutta Tripathy and Tommy Wilkes; Editing by Stephen Coates