Kolkata, July 11 (IANS) The State Bank of India has not been “rushing towards” the new Insolvency and Bankruptcy Code (IBC) to resolve cases of defaults as the entire ecosystem required for the new law has not so far been fully created, its chairperson Arundhati Bhattachrya said on Tuesday.
“The banking sector has in one voice asked for the Bankruptcy Code. As the country matures and evolves, it is necessary to have a judicial framework for orderly resolutions of assets. We cannot have makeshift structures that we were having earlier. So, we have been asking for a bankruptcy law and that has come.
“Now, the reason why we have not been rushing towards this is because with the law also you need to set up the ecosystem,” she said.
Bhattacharya noted that first of all, the bench of National Company Law Tribunal (NCLT) has to be created, people have to be deputed on the bench and next, one needs to create an information utility, which has not come yet.
She also cited the requirement of certified and registered resolution professionals to go with the resolution process.
“So, it has taken a little time for the law to be passed, rules to be notified and all the infrastructure to be created. Now, the ecosystem has begun getting created…it has been created, but not fully. And that is why we have seen that slowly the cases have been going on,” she said.
The SBI chief said all the 12 stressed accounts, which were identified by the Reserve Bank of India, were receiving its attention and it hoped to see fast resolution for the settlement of dues through the IBC.
“All of the stressed accounts are receiving our attention. As and when it will come up in front of the NCLT, we will be making our representations. And we hope that these resolutions will happen as fast as it currently laid out in the law,” she said.
Last month, the apex bank had identified 12 large accounts with exposure of more than Rs 5,000 crore and more than 60 per cent of which is recognised as NPAs. Banks have to refer to the IBC for these accounts.
Bhattacharya said the amount of provisioning that needs to be made on the 12 stressed accounts would “slightly” be above of what the bank would have made in any case.
“It will obviously hit the bottomline (of SBI), but not to that extent,” she said.
She was in the city for the inauguration of bank’s wealth management services and Bhattacharya said the bank is among the first PSU lender to introduce such services. It is targeting to have SBI Exclusif outlets in 13 centres in the country in the current financial year.