Religare Finvest lenders to move RBI for insolvency

Lenders to Religare Finvest Ltd passed a resolution early last week to request the Reserve Bank of India (RBI) to start insolvency proceedings against the finance company after the banking regulator rejected the management's proposal to grant a 'change of ownership status' making it difficult to implement debt restructuring plan under the current regulatory framework. Under the Insolvency and Bankruptcy Code (IBC) framework, only the RBI can refer a finance company for insolvency proceedings. Lenders are of the view that a resolution under IBC will be a transparent process thus generating interest among prospective buyers. The development comes at a time when the Delhi High Court stayed until the next hearing the RBI's decision to deny the change in ownership status of Religare Finvest.