MUMBAI: More than Rs 2 lakh crore worth of stressed loans may be headed to bankruptcy court after the RBI dumped various restructuring schemes on Monday and pronounced the bankruptcy courts as the final arbiter of a defaulting company’s future.These loans are mostly from infrastructure sectors such as power, telecom, roads and ports and are in different stages of restructuring under plans such as strategic debt restructuring (SDR) or the so-called sustainable structuring of stressed assets (S4A). Months after being admitted to these programmes, banks and companies are yet to find a blueprint for resolution.Top public sector banks already saddled with non-performing assets (NPAs) built up over the last five years now find themselves pushed to the wall as failure to resolve these restructured loans could lead to a jump in provisions, eroding profitability and depleting the already low level of capital. They may be forced to go to the government for more capital.“Our estimates are the top 50 accounts which make up for more than 50% of the NPAs are provided at 45% which could increase to 60% in the next fiscal year,” said Krishnan Sitaraman, senior director at rating company Crisil. “We still continue to expect NPAs to peak in March 2019.”Stressed assets have piled up in the past few years with the top four state-run banks accounting for nearly Rs 1.37 lakh crore of such assets. State Bank of India is at Rs 50,482 crore, Punjab National Bank at Rs 67,129 crore, Bank of India Rs 10,633 crore and Bank of Baroda Rs 9,021 crore. Some of these loans could become NPAs.“In the CDR, for example, 600 cases were introduced out of which 200 never made it. Only around 90 cases were successfully dealt with, even that was years ago. Around 130 cases totalling Rs 1.25 lakh crore failed. I think many power projects from groups like Jaypee, GMR, Jindal Thermal which are stuck due to lack of power purchase agreements or a sharp drop in power tariffs will be candidates for NPAs now,” said a veteran banker who now tracks NPAs for an asset reconstruction company.Bankruptcy filings could mean extra charge on capital as provisions for such cases is 50% compared with 15% provided for restructured loans. Initial estimates put the amount that banks may have provided for these loans at Rs 50,000-60,000 crore which will hit banking profits. Shares of public sector banks are likely to slide when the markets open on Wednesday as investors fear that RBI’s moves will delay recovery. This could further put banks out of the loan market and will increase the opportunity for NBFCs to gain market share.“Clearly there is pain coming through in the next few quarters. How we will restructure, how big are the numbers and what impact it will have on our profits are yet to be ascertained,” said a senior executive from SBI who did not want to be identified. Banks were shut on Tuesday for Mahashivratri but many bankers were in their offices trying to figure out what could be the impact of the shocking RBI diktat late on Monday night.Twenty public sector banks got Rs 88,000 crore of capital in the current fiscal of which Rs 80,000 crore was through recapitalisation bonds and Rs 8,139 crore as budgetary support while banks will raise Rs 10,312 crore from the market. All this capital is now likely to go down in provisions for bad loans leaving little or nothing for lending. Bankers are preparing for the inevitable. “What cannot be cured must be endured,” said a banker from another state-run bank. “The only thing it gives us is certainty because there is now a consolidation of all restructuring with focus on the bankruptcy code,” she said.Gross NPAs and standard restructured advances of banks are estimated at 12.6% of total loans as on September 30, 2017. This together with so-called SMA 2 accounts which are overdue for between 61and 90 days — estimated to be around 3.5% of gross advances — could spike bank NPAs beyond 16%, much higher than the gross NPA level of 10.3% as on September 30, 2017, according to rating company ICRA.Bankers said the failure to find resolution in the different restructuring schemes could have forced RBI’s hand. Asset reconstruction companies themselves see it as an opportunity. “Banks will now have 180 days to find a solution, restructure loans or sell these assets which will open up the opportunity for us,” said Siby Antony, chairman of Edelweiss ARC.