Question

Which bank has started insolvency resolution process against Lanco Infratech Ltd. following a directive from the Reserve Bank of India (RBI), while this is the first resolution process initiated by the lenders against 12 large borrowers identified by the RBI recently?

• A. State Bank of India
• B. IDBI Bank
• C. Punjab National Bank
• D. Bank of India

Hint:

When answering current affairs questions related to banking and insolvency, always connect the institution (bank) with the company or directive mentioned by RBI/SEBI to avoid confusion.

Answer 1

The Correct Option is B

Step 1: Understand the context.
The Reserve Bank of India (RBI) identified 12 large corporate borrowers with high levels of non-performing assets (NPAs) for immediate insolvency resolution under the Insolvency and Bankruptcy Code (IBC). 

Step 2: Focus on the case of Lanco Infratech Ltd.
Among these borrowers, Lanco Infratech Ltd. was one of the first companies against whom insolvency proceedings were initiated. 

Step 3: Bank that initiated the process.
IDBI Bank was the lead lender that filed for insolvency proceedings against Lanco Infratech Ltd. as directed by the RBI. 

Step 4: Eliminate incorrect options.
- (a) State Bank of India → Largest lender but not the initiator in this case.
- (b) IDBI Bank → Correct; started insolvency resolution process.
- (c) Punjab National Bank → Not the lead initiator.
- (d) Bank of India → Not involved in initiating this process. \[ \Rightarrow \boxed{\text{IDBI Bank is the correct answer.}} \]

Answer 2

Rather than recalling the fact directly, each bank's typical role as lender to large infrastructure borrowers like Lanco Infratech can be considered.

1. Option 1 (State Bank of India): SBI is the country's largest lender and was involved in many of the RBI's identified accounts, but it was not the bank that moved first against Lanco Infratech.
2. Option 2 (IDBI Bank): IDBI Bank had significant exposure to Lanco Infratech's debt and took the lead in filing for insolvency proceedings once the RBI flagged the account.
3. Option 3 (Punjab National Bank): PNB had exposure to several stressed accounts but was not the lender that initiated this particular case.
4. Option 4 (Bank of India): Bank of India was not the lender that filed the insolvency application against this company.

The lead role in this specific filing belonged to IDBI Bank, matching option 2.

Hence, the correct answer is IDBI Bank.