RBI Identifies 12 Mega Defaulters, Asks Banks to Start Bankruptcy Proceedings

The Reserve Bank of India (RBI) said on Tuesday it has identified 12 of the largest loan defaulters and will order lenders to start bankruptcy proceedings against them to start unclogging the $150 billion in bad debt plaguing Asia's third-largest economy.

The move comes about a month after the government gave the RBI greater power to deal with bad loans, including directing banks to initiate an insolvency resolution process in the case of a default under the bankruptcy code.

The RBI said the 12 accounts constituted about 25 percent of the overall gross non-performing assets, adding it will direct lenders to begin insolvency proceedings around these accounts.

The committee narrowed the list to 12 by focusing on accounts owing more than 50 billion rupees ($777.2 million), where 60 percent or more of the loan had been already classified as non-performing by banks as of March 31, 2016.

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