The government has decided to set up a committee headed by the Chairman of the State Bank of India to review and submit a fresh list of stressed bank accounts to be transferred to NCLT and strengthen the resolution process.

This would be in addition to the top 20 accounts identified earlier by banks for admission to the NCLT.

The decision on review of a new major distressed account was taken at a review meeting chaired by Department of Financial Services (DFS) Secretary M. Nagaraju along with CEOs of public sector banks (PSB) and other agencies.

During the meeting, Nagaraju also asked PSB chiefs to regularly monitor and review the top 20 cases of the Insolvency and Bankruptcy Code with banks in connection with their mismanagement of assets.

The DFS secretary has asked banks to review their top 20 cases at the CEO level, with all procedures to be followed by senior officials of at least the rank of CEO.

A detailed review of the top 20 accounts awaiting admission to the NCLT, reviewing their status and outlining actions required to expedite the process, has also been undertaken. Furthermore, banks have been asked to minimize procedural delays and strongly oppose unnecessary postponements.

Commitment to efficiency

The meeting was organized to address key operational challenges and improve the effectiveness of bad asset resolution mechanisms through the National Asset Reconstruction Co. Ltd (NARCL) and the National Company Law Tribunal (NCLT).

Apart from bank CEOs, the meetings were also attended by senior officials from DFS, Insolvency and Bankruptcy Board of India (IBBI), Ministry of Corporate Affairs (MCA), NARCL and India Debt Resolution Co . Ltd (IDRCL).

Discussion of cases at NARCL focused on accelerating account resolution timelines. Nagaraju highlighted the central role of NARCL as a specialized entity designed to accelerate the resolution of high-value stressed assets, thereby strengthening the financial ecosystem.

During the meeting, it was informed that NARCL had acquired 22 accounts with exposure of ₹95,711 crore, demonstrating its effectiveness in driving resolutions. Additionally, 28 accounts with exposure of ₹1.28 trillion was resolved by the banks, after NARCL made its offers, reflecting the indirect impact of NARCL’s presence in successful settlement/continuation of recovery through other resolution mechanisms .

Banks have been advised to strengthen their synergies with NARCL to ensure effective and speedy resolutions. A committee under the chairmanship of the SBI would be established to review and submit a new list of accounts to be transferred in order to strengthen the resolution process and align the process with its intended objectives.

Review of cases awaiting admission before NCLT courts focused on resolving delays in admission of Corporate Insolvency Resolution Process (CIRP) applications and resolving procedural inefficiencies having an impact on resolution times.

Regarding the lack of real-time information sharing with financial creditors (FCs) on applications filed by operational creditors (OCs), which often caused coordination problems, MCA representatives informed of the proposed plan already in place to develop an integrated portal to keep banks informed of all procedures, thereby strengthening the transparency and coordination of the resolution process.

The meetings reaffirmed the government’s commitment to strengthening the recovery framework through the coordinated efforts of all stakeholders, ensuring a stronger and more effective resolution process.