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A top official from SBI stated that Infrastructure Investment Trusts (InvITs) are currently immune from insolvency proceedings and emphasised the necessity of bringing them under the Insolvency and Bankruptcy Code (IBC). Ashwini Kumar Tewari, managing director of the bank, explained that lenders require assurance regarding their ability to recover dues from InvITs in case of default. He mentioned ongoing discussions with the Reserve Bank and the government on this matter. Addressing an NBFC event organised by Assocham, Tewari remarked, We need to bring these trusts, which are bankruptcy remote, within the purview of the IBC because that will go a long way in giving us the assurance that this is like any other asset. He elaborated on the current responsibilities of InvITs and special purpose vehicles, highlighting existing gaps that need clarification and assurance for lenders. Tewari emphasised the need for clarity and assurance in this space, stating, This space needs clarification; this space needs assurance to the lenders that in case there is a legal testing of default, etc., it will be the same as any other lending that they do within this space (infrastructure). Regarding the operational aspects, he pointed out that banks lack the ability to change management at entities, a feature available under the IBC that has been utilised in the past. Tewari expressed SBI's optimism about InvITs, noting their role in mitigating long-term risks post-project completion and providing stable cash flow to pension funds and other investors. Furthermore, Tewari raised concerns about the extensive list of lenders associated with non-banking financial companies (NBFCs) and advocated for consortium arrangements to manage credit risks effectively. He highlighted the regulatory scrutiny faced by the NBFC sector following the IL&FS crisis and stressed the importance of aligning regulations between banks and NBFCs to mitigate risks associated with funding. Karthik Srinivasan, group head for financial sector ratings at domestic rating agency Icra, mentioned that the banking industry's exposure to NBFCs is currently at an all-time high, with over a tenth of the overall portfolio. He noted variations in credit quality among NBFCs and emphasised that those maintaining better credit quality would not encounter challenges in funding. Srinivasan also highlighted concerns about asset quality in certain pockets of the NBFC sector, particularly the rapid growth in unsecured books by some retail NBFCs compared to overall asset growth rates.