Mumbai: In the absence of general guidelines from the Reserve Bank of India (RBI), State Bank of India (SBI), on behalf of the lenders’ consortium, has sought special permission from the central bank for conversion of debt into equity in Jet Airways (India) Ltd. This comes after the Supreme Court quashed the RBI’s 12 February circular allowing such conversions in companies with negative net worth.
SBI, on behalf of the lenders’ consortium, had earlier proposed to convert the airline’s debt into equity for a notional value of ₹1 for a 51% stake in the distressed company.
This move was based on RBI’s circular which the Supreme Court declared ultra vires.
