The initiation of the NPA resolution process has brought in a certain degree of rigour, but it still lacks the credibility to be called a bold initiative
The Reserve Bank of India (RBI) has set the ball rolling for resolution of non-performing assets (NPAs) with the shortlisting of 12 big defaulters. These will now be processed further by the banks before being admitted by the National Company Law Tribunal (NCLT) for further processing of insolvency resolution as per the Insolvency and Bankruptcy Code, 2016. This is a step in the right direction. The 12 borrowers comprise a significant part of the NPAs in the banking system, and therefore need to be handled with the importance that these deserve. The pace and extent of resolution of these assets would also act as an important signal for the remaining NPAs as well as for future delinquencies.