Banks, which were earlier reluctant to even acknowledge bad loans, in the aftermath of the RBIs stricter non-performing asset (NPA) recognition norms, have started provisioning for them.
However, there has been little clarity on the recovery or resolution of the NPAs. To speed up the recovery, the government recently introduced the Insolvency and Bankruptcy Code (IBC), providing the RBI sweeping powers to deal with the situation.
Within a month of the IBCs introduction, the RBI has decided to crack the whip on 12 big defaulters.
Companies you should stay away from
The risk that these debt-riddled companies come with far outweighs any reward.
It is best if retail investors stay away from heavily indebted companies
Source: ET…
Read the full article at: http://economictimes.indiatimes.com/wealth/invest/what-the-rbi-action-on-npas-means-for-you/articleshow/59296277.cms