RBI unlikely to challenge SC order, may revise circular Read more at: //economictimes.indiatimes.com/articleshow/68697995.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Mumbai: The Reserve Bank of India (RBI) could revise its bankruptcy circular to ensure that an amended version of the directive complies with norms, although the regulator cannot dictate a blanket order for taking all companies above a threshold to insolvency courts, lawyers said.
On Tuesday, the Supreme Court quashed the RBI’s February 12, 2018 circular, putting a 180-day deadline to refer bad loan accounts over ?2,000 crore toThe central bank is unlikely to challenge the SC order.
“We do not want to challenge an order which is already passed now. Our legal team is studying the order minutely and we may decide on the future course of action depending on that. The governor will meet the press after the policy announcement on Thursday where he may address the issue,” said a senior RBI official.
On Tuesday, the Supreme Court quashed the RBI’s February 12, 2018 circular, putting a 180-day deadline to refer bad loan accounts over ?2,000 crore toThe central bank is unlikely to challenge the SC order.
“We do not want to challenge an order which is already passed now. Our legal team is studying the order minutely and we may decide on the future course of action depending on that. The governor will meet the press after the policy announcement on Thursday where he may address the issue,” said a senior RBI official.
Lawyers, however, believe that Tuesday’s judgement will not affect cases filed before the February 12 circular was announced.
“This judgement will affect the applications filed solely on the basis of the RBI circular. This means all applications filed on the basis of default or account being NPA can proceed under IBC,” said KP Sreejith, manging partner at IndiaLaw LLP.
In other words, this ruling will not affect the 12 cases, such as those of Essar Steel.
“This judgement will affect the applications filed solely on the basis of the RBI circular. This means all applications filed on the basis of default or account being NPA can proceed under IBC,” said KP Sreejith, manging partner at IndiaLaw LLP.
In other words, this ruling will not affect the 12 cases, such as those of Essar Steel.
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