The State Bank of India (SBI) has sought an urgent meeting with finance minister Nirmala Sitharaman to request changes to the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act with a view that the alterations will allow asset reconstruction companies to participate in bankruptcy proceedings.
SBI’s request is to consider changes to the SARFAESI Act and bring it at par with Insolvency and Bankruptcy Code (IBC) so as to allow Asset Reconstruction Companies (ARC) to act as resolution applicants (RAs) and invest equity in distressed firms.
The move has come in a bid to save Aircel’s insolvency resolution plan.
The request from SBI comes days after UV Asset Reconstruction Company met the finance minister and sought her intervention in this case. Earlier, the Reserve Bank of India (RBI) had rejected UV Asset Reconstruction Company’s resolution plan for Aircel on the grounds that ARCs cannot infuse equity in an insolvent company at the resolution stage.