New Delhi: Debt-ridden auto component maker Amtek Auto on Monday said insolvency proceedings initiated by a consortium of banks led by Corporation Bank have been accepted by the National Company Law Tribunal (NCLT). "The application filed by Corporation Bank under section 7 of the Insolvency and bankruptcy Code, 2016... before NCLT, Chandigarh has been admitted by the tribunal," the company said in a filing to the Bombay Stock Exchange (BSE). Bankruptcy proceedings have also been initiated against other companies including Electrosteel Steel, Lanco Infratech and Jyoti Structures Ltd which are among the 12 cases of non-performing assets (NPAs) or bad loan identified by the Reserve Bank of India.
The 12 accounts alone constitute a quarter of the over Rs 8 lakh crore of NPAs. Of the total, Rs 6 lakh crore are with public sector banks.
Once a case is admitted by the NCLT, there is a 180-day timeline to decide on a resolution plan, though 90 days can be given in addition. If a plan is not decided, then the company goes into liquidation.
The internal advisory committee (IAC) of the RBI, after its meeting on June 13, had recommended 12 accounts totalling about 25 per cent of the gross NPAs of the banking system for immediate reference under Insolvency and Bankruptcy Code.
These accounts have an exposure of more than Rs 5,000 crore each, with 60 per cent or more classified as bad loans by banks as of March 2016.