Bombay HC dismisses Srei's plea against RBI's order: Here's what it means according to expert

Resolving Srei may be tougher than DHFL

The RBI has appointed Rajneesh Sharma, former chief general manager of Bank of Baroda, as the administrator to manage the affairs of the two companies.

A Srei Group spokesperson had said SIFL was "shocked" by RBI's move as banks have been regularly appropriating funds from the escrow account they have controlled since November 2020, and added that necessary steps as advised by its lawyers will be taken.

Nilang Desai of AZB and Partners said both counsels argued very well, "Counsel for RBI made claims that this was a fitting action for the apex bank to take the step, which has been taken. There is nothing arbitrary or discriminatory here and the courts must interfere with the decision of a financial regulator in the rarest of cases. It seems to me that this does not seem to the court a case where the RBI has acted in a discriminatory manner or in an arbitrary manner and therefore it did not feel any need to exercise judicial discussion."

Also Read: SREI Board superseded by RBI; here’s what’s next

"SREI’s arguments were that the arguments put forth by the RBI in the action of supersession had all been responded to. The actions taken by RBI were facts that may not be entirely in place or entirely correct etc. I think RBI’s point was that it has all the evidence that the bank needs. The RBI has submitted their reports, reports from the lenders, that it has all the evidence that it needs in such a case to go ahead and take the action it thinks is fitting. The bank also has written various letters to Srei Group explaining to them, what the issues are, what the concerns are etc," he said.

Also Read: DHFL Resolution: A feather in the cap of RBI and IBC

"In RBI's views, there is not enough that has been done to fix the problem in Srei cause. Also, Srei is in a place where the RBI feels that it is a fitting case to initiate insolvency proceedings and replace the management and then take further steps that they think fit," he stated.