The Reserve Bank of India (RBI) on October 4 superseded the boards of SREI Infrastructure Finance and SREI Equipment Finance, citing concerns over governance and payment defaults and referred them for resolution under the insolvency law, .This is only the second time in as many years that RBI has referred defaulting entities for resolution under the Insolvency and Bankruptcy Code (IBC), after having set the precedent with DHFL back in 2019.An RBI audit last year had already found over Rs 8,500 crore of potential related party lending by SREI group companies.RBI superseded the boards of both the NBFCs and named Rajneesh Sharma, former chief GM of Bank of Baroda, as the administrator.Also read: SREI will be a very different challenge than DHFL, says R SubramaniakumarThe RBI will approach the National Company Law Tribunal (NCLT) for appointing the administrator as the insolvency resolution professional. In recent years, the central bank has been taking strict action against defaulting entities. Under the governorship of Shaktikanta Das, the boards of lenders of four entities -- PMC Bank, Yes Bank, DHFL and Lakshmi Vilas Bank -- have been superseded earlier.To discuss the way ahead for SREI, CNBC-TV18’s Latha Venkatesh and Ritu Singh spoke to special panel of experts -- Ashwani Bhatia, MD, SBI; T.T. Srinivasaraghavan, Advisory Comm to Admin of SREI; Bahram Vakil, Founder and Senior Partner at AZB and Partners; and Abizer Diwanji, National Leader, Fin Services at EY IndiaAbout the red flags, Bhatia said: “We were aware that something was not right with the company some time back, but the banks were prevented from taking any action because of a specific NCLT order. Once the case was won by the banks at NCLT, they could move forward, which happened last month. We welcome the decision taken by RBI. As a precedent, we have the example of DHFL, which RBI had referred it to the IBC. I think this is a step in the right direction.”Vakil said, “It has definitely got a lot of complications. As you know, there is no legal concept of group insolvency. But the courts have worked on it on an ad hoc basis, like Videocon, etc. I think something like that will have to be done. We will have to see.”Also read: SREI Infra: Why should bankers invoke IBC when we are ready to pay full money?Diwanji said, “I don't think CLB regulations are designed to address insolvencies or defaults… I think the IBC is a good mechanism. What the IBC does here is it puts a moratorium on what can be paid out to anybody, including the creditors. That leaves the field open to first make sure that we get the house in order in terms of the existing exposures of SREI.”“So, when you actually find out where some of this money has gone, you can certainly go to CLB and request them to use their powers as an administrator as well as under the IBC Act. I think the administrator will have larger powers to get into the company and establish the facts,” Diwanji said, adding that at the moment, there is a situation of mistrust between the existing promoters and the bankers.“What IBC will enable as a first step is clear the air. And then because of the provisions of IBC, those assets will be available to whoever wants to buy them. That kind of a mechanism is very difficult to achieve.” Diwanji said.For entire discussion, watch the video..