Finmin Urges Banks to Expedite NPA Resolution Process by Minimising Delays at NCLT

Financial Services Secretary M Nagaraju recently urged banks to speed up the resolution of cases pending at the National Company Law Tribunal (NCLT). During a review meeting, he stressed the importance of reducing delays in the insolvency resolution process. The finance ministry highlighted this in a statement, noting the need for improved efficiency.

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The meeting included senior officials from the Department of Financial Services, Ministry of Corporate Affairs, Insolvency and Bankruptcy Board of India, and top management from Public Sector Banks. Nagaraju emphasised strengthening recovery frameworks through coordinated efforts for a more effective resolution process.

Resolution Process and Recovery Framework

Banks were advised to accelerate the Corporate Insolvency Resolution Process (CIRP) by avoiding unnecessary adjournments and keeping other recovery channels open. The Secretary also urged banks to oppose any frivolous attempts by opposing parties to delay proceedings.

It was noted that some accounts have been resolved since the last review using various recovery mechanisms. The Department of Financial Services (DFS) encouraged banks to regularly review their top 20 cases and monitor accounts where Resolution Plans have been pending with the Committee of Creditors (CoC) for over three months.

Focus on Pending Cases

Banks were also instructed to focus on vacating stay orders to resume resolution processes promptly. This would help avoid further delays and ensure timely resolutions. The emphasis was on maintaining momentum in resolving cases efficiently.

The meeting underscored the importance of a robust recovery framework. By minimising delays and coordinating efforts, banks can enhance the effectiveness of insolvency resolutions. This approach aims to streamline processes and improve outcomes for all stakeholders involved.

The finance ministry's statement highlighted these discussions as part of ongoing efforts to strengthen India's insolvency resolution framework. The focus remains on ensuring timely and efficient resolutions while addressing challenges in the current system.

With inputs from PTI