The ministry’s directive is a time when banks are still developing a strategy to acquire Bhushan Power and Steel (BPSL) of 19,350 crore in the Supreme Court’s decision. The Supreme Court noted that at all stages of the litigation, the ambivalent position taken by the creditor or the COC committee clearly demonstrated that it was fouled without exercising its business wisdom in the interests of the creditor.
While the government tends to support banks in exploring all legal options, it wants them to insert vulnerabilities to avoid other similar situations.
“The performance of advocates also needs to be evaluated and rationalized in case allocation,” the above official said, adding that the idea is to continuously monitor and reduce suspense at all stages.
A bank executive said lenders have also begun reconciling unresolved but resolved cases in debt recovery courts and dramas.
“There will be different approaches for small and high-value cases of DRT so that there is no dissemination of resources and maximum recovery will be achieved,” he said.
Last week, Financial Services Minister M Nagaraju chaired a review meeting to monitor the progress of the PSB in pending cases to be cleared for admission to the National Corporate Law Tribunal (NCLT).
The Ministry of Finance noted in a statement that it is recommended that banks speed up solutions by minimizing submission of CIRP applications, avoiding unnecessary adjournment, and while maintaining delays in other recovery channels.
“Bank advocates should oppose any attempt to delay the opposition’s litigation process,” it said, adding that banks were urged to regularly review their first 20 cases and monitor for more than three months in case the COC’s solution to be considered.
The government further instructed banks to focus on dismissal in order to resume the resolution process without further wasting time.
