With India’s central bank (Reserve Bank of India) having identified 12 accounts that covered 25% of the banking system’s non-performing assets or bad loans, banks have begun bankruptcy proceedings against the defaulters.

The first company to face such proceedings is Lanco Infratech, a power and road construction firm. Its main lender IDBI Bank and others have decided to recover its dues by taking the resolution to insolvency courts, reports Economic Times.

IDBI Bank has fund-based exposure of Rs 77.99 billion (US $ 1.21 billion) and non-fund based exposure of Rs 33.49 billion (US$ 52 million) as on March 2016, while the company, promoted by L Rajagopal, a former Congress party parliamentarian, owes nearly Rs 180 billion (US$ 2.79 billion) to various banks. Its current market capitalization is just Rs 6.13 billion (US$ 10 million), the daily added.

The Indian government had recently amended the Reserve Bank of India (RBI) Act, giving powers to the central bank to direct banks to take punitive action against individual accounts under the bankruptcy code. Earlier, the central bank could give directions only on an industry basis.

The gross bad debt of the Indian banking system as of March, 2017 was at Rs 7.11 trillion (US$ 110 billion), which means the 12 accounts would be responsible for about Rs 1.78 trillion (US$ 30 billion).

Apart from Lanco, other companies likely in RBI’s black list include Essar Steel, Amtek Auto, Jyoti Structures, Alok Industries, Bhushan Steel, Bhushan Power, Monnet Ispat, Era Infra Engineering, ABG Shipyard, Jaypee Infratech and Electrosteel Steels, reports Firstpost website.