TIL Desk/Business/New Delhi/ The RBI on Wednesday withdrew its earlier circular which mandated banks and financial institutions to disclose their outstanding to IL&FS and its group companies including provisioning required as per income recognition and asset classification (IRAC) and actual provisioning made against NPAs. According to the Reserve Bank of India (RBI), its circular dated April 24, 2019 stands withdrawn.
“In view of the National Company Law Appellate Tribunal (NCLAT)’s order dated May 2, 2019 in respect of company appeal…the instructions contained in the above mentioned circular stand withdrawn,” the RBI said in a notification. On April 24, the RBI had asked banks and financial institutions to disclose their outstanding to IL&FS and its group companies.
The National Company Law Appellate Tribunal (NCLAT)’s order dated February 25 said: “No financial institution will declare the accounts of ‘Infrastructure Leasing & Financial Services Ltd’ or its entities as ‘NPA’ without prior permission of this Appellate Tribunal.” The RBI, however, has since then contested the view and said that banks should classify the accounts of IL&FS and its companies as NPAs.
