New Delhi, Dec 16 (IANS) State Bank of India (SBI) Chairman Rajnish Kumar on Monday said that National Company Law Tribunal (NCLT) is not the right platform for resolution of bankrupt small and medium enterprises (SMEs)
Speaking to the media on the sidelines of an event here, Kumar said that the platform of the NCLT and the Insolvency and Bankruptcy Code (IBC) should be utilised in the cases which involve large sums of stressed assets, and multiple lenders and taking SMEs to the NCLT would burden the system.
“The kind of work you need to do in the IBC and the kind of infrastructure you use, for SME it is not very suitable…SMEs, I have said that they have to be treated differently,” he said.
“IBC should be used where there is bigger amount and multiplicity of lenders is there,” Kumar added.
He, was of the view that the model of resolution of SMEs can be decided on a “case-by-case” basis.
Regarding resolution of major bankrupt firms such as Bhushan Power and Steel and Alok Industries, he said that both the cases are “very close” to resolution.
He said that the SBI is likely to recover around Rs 4,000 crore from Bhushan Power and Steel while it would get around Rs 1,700 crore from Alok Industries’ resolution.
On the successful resolution of Essar Steel, he said that the “most crucial” of the IBC has been resolved on Monday.
He said that the recovery of Essar’s dues would help boost profitability in the third and fourth quarter of the current fiscal.
Last Friday ArcelorMittal, the successful bidder of Essar Steel, transferred Rs 40,000 crore to SBI, the lead banker of Essar and the state-run bank was scheduled to settle the dues of other banks on Monday.