Banks are going to transform loans worth Rs 35,000 crore made to Srei group as non- performing assets in September quarter after an appeals tribunal cleared the hurdles. September 7, the National Company Law Appellate Tribunal set aside December 30, 2020 order issued by the Kolkata bench of National Company Law Tribunal in which ordered that any non- payment of dues by Srei infrastructure Finance and Srei Equipment Finance will not be recognised as default till a scheme of arrangement is signed by all creditors, which includes lenders as well as bond holders. However many banks have already downgraded loans to Srei Equipment Finance Ltd and Srei Infrastructure Finance Ltd as stressed loans in the last quarter, accelerated provisioning will be made in the current quarter.
Srei infrastructure had been pursuing merger with Srei Equipment Finance since 2019, Srei group requested NCLT on December 30. 2020 banks not to take any coercive action against two companies even requested not to classify the account as NPA, until the merger is completed.