Essar Steel lenders to appeal against NCLAT order on creditors: SBI chief

SBI chairman Rajnish Kumar, whose bank has lent more than Rs 15,000 crore to Essar Steel, said the NCLAT verdict will discourage banks from taking stressed asset cases to the insolvency process

Essar Steel lenders will approach the Supreme Court to appeal against the National Company Law Appellate Tribunal's (NCLAT) decision putting financial and operational creditors at par for settling claims, said State Bank of India chairman Rajnish Kumar on Wednesday.

Kumar, whose bank has lent more than Rs 15,000 crore to Essar Steel, said the NCLAT verdict will discourage banks from taking stressed asset cases to the insolvency process.

Banks will be hesitant till such time that the principles of law are very cleared laid down, and only the Supreme Court can do that, he said.

Kumar said the Supreme Court had earlier said the Essar Steel case that operational and secured financial creditors are separate classes. Lenders will have to see how the matter proceeds before the Supreme Court.

"Let us see what is the outcome of the appeal. There have been so many amendments in the IBC law, and I am sure if required there will be one. Let us be patient about it," he said in Mumbai, referring to the Insolvency and Bankruptcy Code.

"As a secured creditor, why should I do what all I have done? There are two different class of creditors, which is recognised by the Companies Act and even under Section 230 when any scheme of arrangement is filed, the voting is different for different class of creditors," he said at the sidelines of a book launch.