This blog will keep track of key global and local developments impacting business and markets through the day. Important local and global political developments will also find resonance here.
The Reserve Bank of India has ordered banks not to initiate bankruptcy proceedings against Jaiprakash Associates, reports The Economic Times. The move is possibly in anticipation of legal complications after a Supreme Court ruling barred its promoters from selling or transferring assets, bankers said. The ruling was aimed at safeguarding the interests of buyers of homes being built by the company.
Jaiprakash Associates is among 28 companies that banks were directed to refer to bankruptcy court if debt resolution plans weren’t in place by the end of 2017. It is the only company in the list that has received a special dispensation from RBI in this regard, bankers said.
“The regulator has told us to ‘keep on hold’ the move to refer Jaiprakash Associates to the NCLT (National Company Law Tribunal),” a senior bank official said. “The regulator also indicated the move to keep it on hold was ‘with reference to the recent Supreme Court ruling’ that prevents the promoters from selling their assets,” he said.