Ministry of corporate affairs (MCA) decision to ask the Reserve Bank of India (RBI) for deferment of IL&FS provisioning will create uncertainty, said Sandeep Parekh of Finsec Law Advisors.
What the ministry is asking RBI is a deferment of provisioning and it doesn’t create or see legal rights and liabilities as it is only in the internal books of accounts how you treat that, Parekh said.
"So I think both the processes will continue simultaneously because this is only how you write it in your books, it has got nothing to do with the actual payment of money by these companies,” he added.
The government on Tuesday took stock of the IL&FS debt crisis, sources told CNBC-TV18. The meeting was chaired by the DEA secretary Subhash Garg and MCA officials were also part of it. Uday Kotak, the chairman of the IL&FS board, was also present.
In the meeting, the government decided to approach RBI seeking special dispensation when it comes to certain companies of IL&FS.