Recently Supreme Court of India, has pronounced its judgement striking down the RBI Circular of 2018 on Bad Loans and Stressed Assets.

On April 2, the apex court quashed a circular issued by the Reserve Bank of India wherein the defaulting companies would be referred to the National Company Law Tribunal for insolvency proceedings in case of non-resolution in 180 days from the day of default.

In this regard, the insolvency and Bankruptcy Board of India Chief has come out with its statement as under:

  • The Supreme Court’s judgment on the RBI circular does not disturb the rights of creditors to initiate insolvency proceedings.
  • In fact, this will bring in behavioural changes, making creditors more responsible for their actions and in actions.
  • This was applicable in cases involving loans worth over ₹ 2,000 crore. In view of this judgment, a bank creditor now needs to ask itself when it should initiate the proceeding and justify itself why it is initiating or not initiating the proceeding in case of a default.


The Insolvency and Bankruptcy Board of India (IBBI) is a key institution in the implementation of the Code.


Author: Admin Bankedge

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