In a significant move to accelerate corporate insolvency resolutions, chief executives of public sector banks have been directed to personally monitor the top 20 cases pending for admission and the top 10 accounts awaiting resolution at the National Company Law Tribunal (NCLT).
High-Level Review Meeting Conducted
The directive came during a crucial review meeting led by M Nagaraju, Secretary of the Department of Financial Services (DFS). The meeting saw participation from senior DFS officials, representatives from the Insolvency and Bankruptcy Board of India, and top management of state-run banks.
During the comprehensive discussions, banks were instructed to take swift action for disposing of cases where resolution plans remain pending with committees of creditors (CoC). Secretary Nagaraju emphasized the need for banks to adopt a strategic approach that would streamline and strengthen the Insolvency and Bankruptcy Code (IBC) ecosystem.
Focus on Timelines and Coordination
The review acknowledged progress on multiple fronts, including cases already admitted at NCLT, those resolved through the tribunal, and matters disposed of outside the IBC framework. Particular attention was given to major cases still awaiting admission and resolution at various NCLT benches.
Secretary Nagaraju stressed the critical importance of adhering to timelines for both admission of Corporate Insolvency Resolution Process (CIRP) applications and the resolution of cases. This emphasis on timely processing aims to maximize value and enhance recovery rates for banks.
Coordinated Approach for Faster Resolution
During deliberations on cases with pending resolution plans at CoC level, banks received specific advice to adopt a coordinated approach for reaching final decisions. They were also instructed to work closely with their legal counsels to ensure early admission of pending cases.
This coordinated effort is expected to lead to a more robust and efficient resolution process while minimizing delays in filing CIRP applications. The overall objective remains clear: expedite the resolution process and improve recovery outcomes for public sector banks through the IBC mechanism.
