HDFC Bank Reviews Options After NCAT Clears Near-Total Debt Write‑off for Founder

In a development that could reshape the landscape of corporate insolvency in India, HDFC Bank is assessing its legal recourse following an NCLT decision that cleared a near‑total debt write‑off for Essel Group founder Subhash Chandra. The tribunal’s approval means the borrower would settle creditor claims totalling approximately ₹22,006.57 crore by paying a mere ₹6.5 crore.

The bank’s exposure, which formed only about 3.2% of the total claim, was originally extended by HDFC Limited prior to its amalgamation with HDFC Bank. A senior bank official confirmed that appropriate provisions have already been booked, and the account was integrated into the bank’s balance sheet as part of the merger.

Opposition to the scheme came chiefly from L&I Housing Finance, which highlighted that its approved claim of ₹1,322.39 crore would be reduced to a payment of just ₹38.09 lakhs – a recovery rate of roughly 0.028%. The NCLT, however, dismissed these concerns, allowing the plan to proceed under Section 114 of the Insolvency and Bankruptcy Code after a split decision among its two‑member bench was resolved by third member Nilesh Sharma.

Should HDFC move forward with an appeal at the NCLAT, the case will probe the balance between creditor rights and the need for viable restructuring avenues in high‑profile insolvency matters.