SBI likely to speed-up hiring to handle insolvency cases


India’s largest lender the State Bank of India (SBI) is planning to hire more bankruptcy and legal firms for strengthening its stressed assets team and handle the cases of above Rs 100 crore under the Insolvency and Bankruptcy Code (IBC).

“The bank seeks to empanel advocates/law firms for handling cases of above Rs 100 crore,” the SBI said.

As of now, the bank is in the process of examining the applications. It currently has 20 stressed asset management branches across the country which has its reporting to the central stressed asset resolution department.

The bank had invited applications for the appointment of insolvency professionals registered with the regulator Insolvency and Bankruptcy Board of India (IBBI), in February.

Sources from the banking industry suggest that after the Supreme Court of India’s order in April which made the Reserve Bank of India’s (RBI) direction to approach the National Company Law Tribunal (NCLT) in cases of over Rs 2,000 crore NPAs no longer compulsory, banks, namely the SBI, are trying to bring a solution to all the long pending cases under the IBC in a time-bound manner.

Despite the delay in resolution of cases under IBC, banks are choosing it as a preferred mode as compared to other tools.

In the third quarter of the last fiscal, the SBI had reported a posted a profit of Rs 3,955 crore while its asset quality did well with gross NPAs falling to Rs 1.87 lakh crore from Rs 2.05 lakh crore recorded in the previous quarter.

On April 2, the apex  Court had declared the process of referral to the NCLT as non-mandatory,  leaving the choice to the banks, while omitting an earlier RBI circular that gave overt power to the central bank to direct the banks to approach the NCLT over NPAs of over Rs 2,000 crore

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