State Bank may seek RBI approval for DHFL insolvency proceedings

Banks led by SBI may make a representation to the RBI, stating the current resolution process did not find much success and they would like to opt for resolution under the IBC

Within days of the Section 227 of the Insolvency and Bankruptcy Code (IBC) being introduced, banks are deliberating using this to resolve loans to stressed non-banking finance companies (NBFCs).

“State Bank of India (SBI), which has the largest exposure of over Rs 9,000 crore through term loans to Dewan Housing Finance (DHFL), may consider the IBC route. The bank is waiting for the Reserve Bank of India (RBI) to notify which companies can be moved to courts through this mechanism,” said a source.

Sources also said the RBI was in the process of formulating guidelines to invoke insolvency proceedings for