Banks can now declare defaulting accounts of debt-ridden Infrastructure Leasing and Financial Services (IL&FS) and its group companies as non-performing assets, but cannot initiate recovery proceedings.
A Bench headed by National Company Law Appellate Tribunal (NCLAT) Chairman Justice SJ Mukhopadhaya on Thursday lifted the freeze on banks from declaring defaulting accounts of the company and its 300 entities as NPAs.
But the NCLAT said banks cannot initiate the recovery process and debit money and must not withdraw support until a resolution is found.
The Reserve Bank of India had last week asked banks to declare details of their exposure and provisions related to IL&FS as part of their quarterly results.
