The accounts of the Corporate Debtor had been classified as NPA in 2017. The Tribunal took into account the decision of the Supreme Court in Gaurav Hargovindbhai Dave vs. Asset Reconstruction Company(India) Ltd. & Anr Asset and B.K. Educational Services Private Limited vs. Parag Gupta and Associates wherein it was held that the right to sue accrues to the Financial Creditor against the Corporate Debtor on the date on which the Corporate Debtor's account is classified as NPA. Since the present petition was well within the period of limitation when it was initially filed in 2018, after classification of the Corporate Debtor's account as NPA (within 3 years), it is not barred by limitation.

The resolution processes for Videocon Oil Ventures (VOVL) and Sterling Biotech will likely benefit from the introduction of cross-border insolvency norms under the Insolvency and Bankruptcy Code (IBC), according to bankers FE spoke to. In her Budget speech for 2022-23, finance minister Nirmala Sitharaman said that necessary amendments to the code will be made to enhance the efficacy of the resolution process and facilitate cross-border insolvency resolution. While lenders had earlier identified Vedanta Group’s Twin Star as the buyer for 13 entities of the Videocon Group, clubbed together under the corporate insolvency resolution process (CIRP), VOVL was segregated because it owns oil and gas assets in Brazil and Indonesia. The 13 entities of Videocon Industries are now undergoing a fresh process of invitation of bids on court orders. 

Private lender IndusInd Bank NSE -2.27 % sold more than Rs 4,050 Crore of distressed loans to asset reconstruction companies (ARC) in the last three quarters to clean its books, said two people aware of the matter. The bank sold Rs 2,552 Crore loans to Edelweiss ARC and Rs 1,500 Crore to Omkara ARC in separate pools comprising retail and corporate loans, people said. IndusInd Bank's aim to maintain its net non-performing assets below 1% could have prompted the lender to sell the distressed loans, a third person said. IndusInd Bank, Omkara ARC and Edelweiss Arc declined to comment. In the December quarter, the bank sold a retail portfolio of Rs 1,800 Crore for a consideration of Rs 750 Crore under the 15:85 structure to Edelweiss ARC. The recovery is linked to the resolutions done by acquiring ARC.

Nirmala Sitharaman who is the Union Finance Minister in her Budget 2021 speech on 1st February declared an entity in the form of an asset reconstruction company/asset management company or more merely known as a ‘Bad Bank’ to assist the banking system in getting rid of the existing stock of problematic loans. The bad bank will absorb the existing stock of non-performing assets (NPAs) of the banks and shall try for resolution through a professional approach. Among the several other entities operating in India in the asset reconstruction space, the oldest is Asset Reconstruction Company India (Arcil). In fact, Arcil is even owned by a clutch of financial institutions which includes State Bank of India (SBI), IDBI Bank, ICICI Bank (ICICI), Punjab National Bank (PNB), and Avenue India Resurgence Pte.

“In the large corporate sector, things have almost stabilized. Fresh NPAs will be few and far between in the coming years. But covid stress has built up in MSME and retail sectors," said Pallav Mohapatra, managing director and CEO, Asset Reconstruction Co. (India) Ltd at the Mint Annual Banking Conclave. Even as corporate bad loans were brought under control, non-performing assets (NPAs) in small-ticket loans to retail and small businesses are likely to rise in the coming quarters, said experts. “In the case of retail, repayments are dependent on salaries and during covid and lockdowns there were layoffs, salary cuts and at times people were not paid on time. In the case of MSMEs (micro, small and medium enterprises), their manufacturing activity had stopped and they were not getting workers.