India Inc CFOs want the RBI to reduce the threshold further to 66 per cent, as even 90 per cent may not help them much. “The Insolvency and Bankruptcy Code (IBC) requires 66 per cent consent for debt resolution and even during earlier circulars, the RBI sought only 66 per cent voting for corporate debt restructuring. With 90 per cent mandatory voting, chances of debt resolution are still slim,” said the person.
The 100 per cent voting clause has already sent several firms to the National Company Law Tribunal (NCLT) for debt resolution, under the IBC.
Another person in the know said that in one case, a bank with just 3 per cent voting share stalled the entire process and sent an operating company for bankruptcy — resulting in thousands of job losses. In the case of Reliance Communications, too, banks were not unanimous in giving a loan recast package and the company was referred to the NCLT.
One idea floated by banks is to buy out loans of dissenting bankers. The 90 per cent threshold could hit power and infra firms, which are waiting for the RBI’s new circular. On April 9 this year, the Supreme Court had struck down the RBI’s February 12 circular, which had ended all debt restructuring and shut the Joint Lenders’ Forum (JLF) mechanism. The JLF helped clear debt recast proposals as it had the mandate from banks to take expeditious decisions.