Sebi to help banks tackle bad loans

Market regulator to relax lock-in, eligibility norms for preferential share allotments

Banks and infrastructure finance institutions will soon receive a helping hand from the Securities and Exchange Board of India (Sebi) in their fight against bad loans. 

Going ahead, lenders may not be required to observe the six-month lock-in for shares acquired through preferential allotment. Also, the condition that renders a lender ineligible, if it has bought shares of the company in the previous six months, is also likely to be waived.

The move will ensure an easier and faster liquidation of assets acquired by banks through corporate debt restructuring or any other type of restructuring. Often, the restructuring exercise involves