Aircel insolvency: SBI to meet RBI brass on dismissal of UVARCL’s bid

MUMBAI: State Bank of India (SBI) has sought an urgent meeting with the Reserve Bank of India (RBI) to try and sort out the regulator’s objections to the participation of asset reconstruction companies (ARCs) that has imperilled the Aircel insolvency resolution plan, said people aware of the matter. Aircel’s lenders led by SBI are worried that the company may now have to be liquidated.

The RBI’s opposition to ARCs becoming resolution applicants (RA) could scuttle not just the Aircel plan but that of others such as Reliance Communications (RCom) as well. This would hurt state-run banks such as SBI, since they are the biggest lenders to companies that ARCs are looking to acquire in insolvency cases. “SBI officials will meet RBI’s brass in the next few days,” said one of the persons. “There is pressure from ARCs and other banks as well. SBI is the lead bank in many of the committees of creditors and if this does not get sorted,it will lose the most.”