The National Company Law Tribunal (NCLT) on Wednesday admitted insolvency proceedings against Jaypee Infratech Ltd. The Allahabad bench of the tribunal accepted IDBI Bank's plea and classified Jaypee Infratech as insolvent.
IDBI Bank, the leader of the consortium of lenders to the Jaypee Group company, approved the appointment of an interim resolution professional.
According to a report in Moneycontrol News, the board of directors of the company remains suspended. The Tribunal will now appoint an insolvency resolution professional who will assess if a resolution of the company's debt is possible.
Under the Insolvency and Bankruptcy Code, once a case is admitted by the NCLT, a resolution plan must be in place within 180 days of admission. This is extendable by up to 90 days. In case the turnaround doesn't happen, the company's assets will be liquidated.
Jaypee Infratech Ltd is among the 12 accounts identified by RBI for insolvency proceedings.
In June, the Reserve Bank of India had identified 12 accounts for insolvency proceedings with each of them having over Rs 5,000 crore of outstanding loans, accounting for 25 per cent of total NPAs of banks.
The banking sector is saddled with non-performing assets (NPAs) of over Rs 8 lakh crore, of which Rs 6 lakh crore is with public sector banks (PSBs).
These 12 accounts would qualify for immediate reference under the Insolvency and Bankruptcy Code (IBC), the RBI said.
RBI said accounts with outstanding amounts of more than Rs 5,000 crore, of which at least 60% was classified as non-performing by banks as of 31 March 2016, can be referred for bankruptcy.