RBI nudges twin Srei lenders banks to classify account as fraud

If the account is classified as fraud, it will prevent Kanoria from regaining control over the companies. Under 12A of the Insolvency and Bankruptcy Code (IBC), a promoter classified as a wilful borrower or an account classified as fraud cannot submit a settlement plan to lenders. Srei Equipment Finance and Srei Infrastructure Finance were admitted for corporate insolvency proceedings by the RBI last October. A fraud tag can also affect a defaulting promoter’s ability to control other businesses.

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