New board of crisis-hit IL&FS may approach PSBs to restructure their debt

If the government-owned banks agree, the debt restructuring would help IL&FS tide over the immediate financial crisis

The new board of infrastructure financier IL&FS is likely to approach public sector banks (PSBs) to restructure their debt as the Reserve Bank of India’s (RBI’s) norms allow restructuring of debt by non-banking finance companies (NBFCs) registered as core investment company (CIC) with the regulator, according to a source in the RBI. 

The source said under Section 45 of the Reserve Bank of India Act, IL&FS can go in for the loan restructuring proposal and the RBI’s February 12 circular to refer all non-performing accounts above Rs 20 billion to National Company Law Tribunal (NCLT) will not be applicable in the