New Delhi: Public sector banks, led by State Bank of India, have given themselves 180 days to resolve the Jet Airways account even though the time limit has become irrelevant post Supreme Court order that quashed an earlier RBI circular on debt resolution. Official sources in the Finance Ministry said that banks have informed the ministry that they were not ready to wait endlessly to restore health of the beleaguered airline and if attempts to bring in a strategic investor fails or is not completed by June 30, lenders may immediately initiate bankruptcy proceedings against Jet.
“All attempts are being made to see that Jet Airways does not fail and its operations are maintained albeit on a smaller scale. Banks, including SBI and Punjab National Bank (PNB) have already decided to provide interim funding support of Rs 1,500 crore to Jet,” a source in the finance ministry said. “Now effort is on to bring in a strategic investor. But if there are no satisfactory bids, banks would not wait anymore and refer the airline to National Company Law Tribunal (NCLT) for resolution,” the source added.
Jet first defaulted on loan repayment on December 31. Going by this, the 180 day period from default will end on June 30. Once the matter lands in NCLT, banks get another 180 days to find a resolution of the stressed asset with an extension of 90 days, if required. Post this, if banks fail to resolve the account, liquidation process starts. “We will go by the 180-day deadline that was being followed as per now defunct RBI circular. With each day the problem at Jet seems to be multiplying and if a resolution is not achieved immediately, there is no point to drag the issue any further but to take the account for bankruptcy. (IANS)
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