The Reserve Bank of India (RBI) on Monday superseded the boards of Srei Infrastructure Finance and Srei Equipment Finance, and said they will be taken for insolvency proceedings “owing to governance concerns and defaults by the aforesaid companies in meeting their various payment obligations”.
In a statement, RBI said it has appointed Rajneesh Sharma, ex-chief general manager of Bank of Baroda, as the administrator of the companies.
“The Reserve Bank also intends to shortly initiate the process of resolution of the above two NBFCs under the Insolvency and Bankruptcy Rules, 2019 and would also apply to the NCLT for appointing the Administrator as the Insolvency Resolution Professional,” the RBI said in its statement.
As per analysts’ estimates, banks have about Rs 35,000 crore exposure to the SREI group, and a steep haircut is expected as part of resolution.
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