The attachment of Bhushan Power & Steel’s (BPSL’s) assets by the Enforcement Directorate (ED) has made lenders wary of taking the Insolvency and Bankruptcy Code (IBC) route for debt resolution.
“As bankers, we are all concerned about the implication of the Prevention of Money Laundering Act (PMLA) on IBC. It would be very difficult to arrive at a resolution under the IBC and this will derail the entire process. For smaller cases, we are not keen on taking companies through the IBC route and waiting indefinitely for resolution,” says Ashok Kumar Pradhan, managing director at United Bank of India (UBI).
