InvestorQ : I want to know about NCLT resolution. Is it benifical for lenders or company. And what is the effect of NCLT on company
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I want to know about NCLT resolution. Is it benifical for lenders or company. And what is the effect of NCLT on company

Answer
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Neha Samdani answered.
1 year ago


The NCLT resolution is for companies that are in debt and cannot repay the loans. That is when banks refer such companies to NCLT. Then the NCLT appoints a resolution professional who first tries to find a solution.

If there is no solution possible, then they sell the assets of the company and a proportionate amount is distributed among the lenders and the operational creditors of the defaulting company.

The NCLT is a good solution in that the banks are able to at least recover some part of the money and the idle assets of the company are finally put to some productive use.