Govt reviewing BPSL order, to finalise way forward soon: DFS Secretary
BPSL Liquidation Order: Government’s Strategic Review and Next Steps
The Department of Financial Services (DFS) is conducting a comprehensive review of the Supreme Court’s recent judgment ordering the liquidation of Bhushan Power and Steel (BPSL). DFS Secretary M Nagaraju has indicated that the government will soon finalize its approach to address this significant development in one of India’s most watched corporate insolvency cases.
Government’s Response and Strategy
“I have already reviewed (the order) with all the lenders. We have taken a position, we have studied the judgement, we have got our advocates’ view on the judgment. Now we are taking a view in the government on how do we approach the judgement. We will finalise soon.”
– M Nagaraju, DFS Secretary
Key Developments
- Supreme Court rejected JSW Steel’s ₹19,350-crore acquisition bid
- Resolution plan remained unimplemented for over two years
- Court ordered liquidation of BPSL assets
- Government seeking senior advocates’ opinions
Impact on Banking Sector
Major Stakeholders:
- State Bank of India (Lead Lender)
- Punjab National Bank (Lead Lender)
- Other Financial Institutions
The liquidation order poses significant challenges for lenders, potentially resulting in larger haircuts on their receivables compared to the resolution plan.
Legal Options and Next Steps
- Government conducting thorough review of judgment
- Consulting with legal experts and stakeholders
- Banks and JSW Steel retain right to appeal
- Strategic approach to be finalized soon
Additional Financial Sector Updates
In related developments, DFS Secretary Nagaraju also confirmed that the IDBI Bank stake sale process is on track for completion within the current calendar year. The announcement came during the listing of the first securitisation transaction structured by RMBS (Residential Mortgage Backed Securitisation) Development Company.
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