Even as banks try to salvage close to 2,600 crore, lead lender Punjab National Bank has obtained the consent of other banks in the consortium to move a winding up petition against Export Credit Guarantee Corporation of India (ECGC) - the 55-year-old financial institution that has insured a substantial part of banks' exposure to Zoom.
The public sector bank has taken legal opinion from law firm AZB on the matter.
The banking consortium may simultaneously file a performance obligation suit against ECGC, which has insured close to 1,900 crore of banks' credit.
Till now, ECGC has refused to pay the banks' claim on the ground that there have been irregularities and allegations of fraud that the Central Bureau of Investigation is examining.
"The banks will first send a legal notice. If no positive response is received, they will approach the court," a person familiar with the development told ET.
The banks, it is understood, had discussed the subject with the ministry of finance, which in turn had taken it up with the ministry of commerce and industry. The commerce ministry, which has administrative control over ECGC, recently referred the matter to the institution.
"We have no comments to offer on what you have stated. ECGC will initiate appropriate action as and when any situation arises," said ECGC Chairman N Shankar, responding to ET's email query.
In an earlier communication, the institution had spelt out to PNB the reasons why the claim could not be met. But banks - as many as 26 of them in the consortium - think they have enough ground to move court. The lenders are also upset that ECGC is reluctant to refund the premium paid to the institution for covering the exposure. If indeed ECGC has to pay the amount, the outgo would almost wipe out its net worth of around Rs 2,300 crore and force the government to infuse capital to keep it afloat.
Differences between state-owned entities rarely reach courts of law. But, such a possibility cannot be ruled out in a market where all institutions are under pressure to protect their books. All the more because the earlier mechanism of a high-powered committee of senior bureaucrats sorting out a dispute between two public sector organisations no longer exists.
Banks, which had sensed sometime in early 2009 that they could take a hit, have separately filed cases in the debt recovery tribunal to recover their money. The tribunal hearing is expected to begin in month or two.
Sangita Mehta & Sugata Ghosh, ET Bureau Apr 29, 2013, 05.00AM IST