The Supreme Court will on Tuesday pronounce its judgement in the companies’ pleas challenging the Reserve Bank of India’s (RBI) February 12 circular.
A two-judge bench of justice Rohinton Fali Nariman and justice Vineet Saran will pronounce the judgement.
Passed by RBI in 2018, the circular directed lenders to refer any loan account over Rs 2,000 crore under the Insolvency and Bankruptcy Code (IBC) if it is not resolved within 180 days of default.
It also underscored IBC's status as the cornerstone of the bad loan resolution framework, scrapping all previous mechanisms. The circular imposed a one-day default rule. Banks have to treat a company as a defaulter even if it misses repayment schedule by a day.
However, these harsh norms have been criticised in various quarters, including by a parliamentary committee.