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SC opens door for recovery of SBI, PNB, IDBI FROM Essar Steel

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SC opens door for recovery of SBI, PNB, IDBI FROM Essar SteelNew Delhi, Nov 15 (IANS) The big win for lenders of bankrupt Essar Steel following the Supreme Court order on Friday has opened the doors for state-run banks like SBI, PNB, and IDBI Bank as well private banks like ICICI Bank and Edelwiess Asset Reconstruction Company to receive their recoveries from big cases under insolvency resolution.

SBI stock was up 5 per cent, IDBI Bank was up 6 per cent and PNB was up 3.25 per cent in the stock market.

SBI has an loan exposure of Rs 15,430 crore in Essar Steel.

As per ArcelorMittal’s proposal, financial creditors will receive the lion’s share.

Now the operational creditors like Stanchart, DBS Bank will not be at par with financial creditors on distribution of an insolvent company and that will boost the recoveries of these financial creditors.

The issue saw a keen fight among banks and separately between the financial institutions and Essar Steel’s operational creditors who alleged that ArcelorMittal’s winning bid did not meet their dues.

ArcelorMittal already won the bid for Essar Steel, having got the NCLT approval for its Rs 42,000 crore bid.

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