Banking Sector Eyes Legal Battle as NCLT Greenlights Creditor‑Light Plan

The recent NCLT decision to endorse a resolution plan that leaves most creditors with a fraction of their claims has sparked concern across India's banking community.

Union Bank of India announced its intent to approach the NCLAT, claiming the plan does not adequately protect the interests of public sector lenders. At the same time, HDFC Bank is reportedly evaluating a similar appeal, after it found that only 3.2% of its claimed ₹ 680 crore was accepted in the draft settlement.

Analysts say the outcome of these appeals could set a precedent for how future insolvency cases balance private versus public creditor recovery.

If the NCLAT overturns the NCLT order, it may force a renegotiation of the settlement terms, potentially increasing the payout to public lenders but also prolonging the resolution process.