|
|
|
'Banks may need to report HDIL's dues, provisioning status'
|
|
|
|
Top Stories |
|
|
|
|
SME Times News Bureau | 14 Oct, 2019
Public sector banks having fund
exposure to the bankrupt real estate firm HDIL may have to classify the
loans given to it as non-performing assets (NPA or bad loans) under the
RBI norms, make provisions for them and report these to the exchanges,
according to official sources here.
So far, the Reserve Bank of
India (RBI) has not given any directions in this regard as fund exposure
of individual banks are their autonomous commercial decisions even when
an account has gone default and the promoter of the defaulting company
is arrested.
The sources, however, said that RBI norms on NPA
classifications and provisionin are clear and public sector banks (PSBs)
must know when to implement these.
Though PSBs are yet to reveal
their exposures in HDIL, the real estate firm''s annual report says it
has a debt of Rs 1,500 crore and mentions Allahabad Bank, Andhra Bank,
Bank of India, UCO Bank, Union Bank of India, Central Bank of India, LIC
and IDBI Bank among its lenders.
Some private banks are also
believed to have lent to HDIL and the loans were raised by the company
on the personal guarantee of the Chairman and MD, who has been arrested.
Last
week, Mumbai Police arrested HDIL directors, Rakesh Wadhawan and his
son Sarang Wadhawan, in relation to the Rs 4,355-crore fraud at the
Punjab and Maharashtra Cooperative (PMC) Bank .
The RBI guidelines on NPAs state mandates lenders to start the resolution process even if there was a one-day default.
HDIL
is currently in default with various banks and Bank of India had taken
the real estate firm to the National Company Law Tribunal (NCLT) for
recovering dues of Rs 522 crore before the alleged role of HDIL in the
Punjab and Maharashtra Cooperative Bank fradulent deals came to light.
The case is currently under insolvency and Bankruptcy Code (IBC).
According
to an official source, multiple investigative agencies probing the
company also limits the recovery prospects for banks of their loans to
HDIL as it limits their rights to the assets of the defaulting company.
On
the impact of the concurrent processes of the NCLT and the Enforcement
Directorate (ED) on banks recovering their loans, disputes practitioner
and Partner at Khaitan and Company, Diwakar Maheshwari, said: "NCLT's
mandate under the insolvency law is to judicially determine the aspect
of default on part of the debtor to its financial creditors. Any
antecedent wrongdoing amounting to attracting any criminal proceedings
is the exclusive domain of the respective agency, be it CBI, ED or SFIO
and NCLT, does not seem to have much of a say in this aspect under the
insolvency law".
"It is imperative to have a high degree of
coherence between the various independent investigating bodies and the
judicial process under the insolvency law to obviate any inter se
conflict of interest. This can largely be achieved either by legislative
guidance or by judicial determination," he added.
Regarding the
duty of banks to provide details to exchanges on their amount of dues
pending, Maheshwari said that "banks should completely adhere to all its
reporting requirements mandated by law as breaching of the same has
severe legal consequences".
|
|
|
|
|
|
|
|
|
|
|
|
|
Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
|
|
Daily Poll |
|
|
PM Modi's recent US visit to redefine India-US bilateral relations |
|
|
|
|
|
Commented Stories |
|
|
|
|
|
|
|
|