MUMBAI: A bankruptcy appeals court ruling, which ordered Monday that no loan account of IL&FS and its units be put into the nonperforming category without its approval, would save lenders about Rs 10,000 crore in March-quarter provisioning costs, two people aware of the development said.
A two-judge bench of the National Company Law Appellate Tribunal (NCLAT) said that the decision was taken in the interest of the debt resolution plan at the stressed infrastructure financier and its group companies. The IL&FS group, which skipped repayment commitments early autumn and triggered a liquidity squeeze in the financing business, has debt exposure of about ₹91,000 crore.
Banks had a collective exposure of Rs 50,000 crore to IL&FS and they would have been required to set aside at least Rs 10,000 crore as provisioning cover if the loans were categorised as bad, sources told ET after the appeals court ruling.
