The Finance Ministry has reviewed some high-profile cases pending for admission into the National Company Law Tribunal (NCLT). Among the companies discussed was Jaiprakash Associates, which have seen delays in admission under the Insolvency and Bankruptcy Code (IBC). The case has been awaiting admission since 2022.

The meeting was held on April 30, chaired by Financial Services Secretary Vivek Joshi.

Joshi asked banks to move forward in declaring defaults, so that the companies can move towards the resolution process, two sources said.

“Do not hesitate to declare defaults and go for IBC resolution,” Joshi reportedly said at the meeting.

“There was a review meeting to discuss pending cases that are yet to go through IBC, with the highest exposure in terms of monies involved and stakeholders. It included Jaiprakash Associates, which has Rs 37,273 crroe debt exposure in ICICI Bank and others. The meeting deliberated upon the delays in admission under the IBC for resolution,” one of the sources told Moneycontrol.

State Bank of India Chairman and MDs and CEOs of all public sector banks participated in the meeting. MD and CEOs of ICICI Bank, IDBI Bank, Axis Bank, HDFC Bank, Yes Bank and IndusInd Bank also attended .

Long-pending resolutions

SBI filed its insolvency plea application against Jaiprakash Associates, the flagship construction company of the Jaypee Group, with the Allahabad bench of the NCLT on September 19, 2022.

Punjab National Bank (PNB) and IDBI Bank had filed a winding-up petition against Arch Pharmalabs in 2013.

PC Jewellers had defaulted on a Rs 3,278 crore SBI loan in October 2022. However, the company, in 2024, settled the debt and SBI has withdrawn the insolvency proceedings.

The current time for companies to get admission under IBC is 400-600 days, which erodes the value of assets. Though the IBC Code says admission has to be done in 14 days, the timeline is not being implemented.

The IBC, which came into force in 2016, is a key legislation aimed at expediting bankruptcy proceedings of companies.

Lenders have recovered 32 percent of their total claims under the IBC, as on December 2023, but the findings suggest the need for some course correction with respect to the law, RBI Governor Shaktikanta Das had said on January 11 this year.