State Bank of India (SBI) has completed the sale of its Rs 2,261-crore exposure to Bombay Rayon Fashions (BRFL) to JM Financial Asset Reconstruction Company (ARC) for Rs 900 crore, according to persons familiar with the development. The lender has taken a 60% haircut on the transaction but is hoping for an upside from its 29% equity stake in the company. SBI has received Rs 840 crore in cash while the remaining Rs 60 crore is in the form of security receipts redeemable over three years. Even as a part of the loan exposure has been sold, SBI, as the lead lender, is currently running a sale process for the exposures of Bank of India (Rs 127 crore), Allahabad Bank (Rs 108 crore) and Karnataka Bank (Rs 13 crore). Lenders had recast BRFL\u2019s debt under the corporate debt restructuring scheme. Other than SBI, a couple of lenders hold equity stakes in the company. The resolution of the BRFL exposure could have been initiated under the recently signed inter-creditor agreement (ICA), but bankers said the guidelines were awaited. \u201cSBI did want to resolve the account under ICA, but some of the other banks did not want to take that route till the operating guidelines for lead lenders were issued,\u201d a banker explained. These guidelines are yet to be circulated among banks. Emails sent to SBI and JM Financial ARC remained unanswered till the time of going to press. The sale is being conducted through the Swiss challenge method by SBI on the request of the three banks. The 14-day window for bids for these exposures opened on Monday. One of the bankers FE spoke to said that while 13 expressions of interest have already been received for the smaller exposures to BRFL, reconciling them with fragmented shareholding pattern of the asset could be a challenge. While Bank of India has set a 90.22:9.78 ratio for the sale of its exposure, Allahabad Bank and Karnataka Bank are keen on making a 100% cash recovery. SBI will write back Rs 890 crore of the Rs 1,962 crore worth of provisions made against the account, following the sale of its exposure to JM Financial ARC. BRFL is one of the non-performing assets that would have to be referred to the National Company Law Tribunal or resolution under the Insolvency and Bankruptcy Code if it is not resolved by other means over the next few days, as per the Reserve Bank of India\u2019s February 12 circular.