CDB, which had lent $1.78 billion to RCom, had filed the petition under the Insolvency and Bankruptcy Code (IBC) on November 27, after the company defaulted on its dues.

The petition came at a time when the state-owned banks were in talks with RCom for converting a part of their Rs 45,800 crore of loans into equity. The conversion is due by the end of this month.

RCom had earlier taken shareholder approval for conversion of its debt into shares at the rate of Rs 24.70 a share. Banks were, however, reluctant to convert the shares at a price higher than the one prevailing in the market. On Friday, RCom’s shares closed at Rs 11.85.

According to the IBC, banks must make a 50 per cent provision for loans extended to a firm in the same quarter of its being admitted for insolvency.

CDB was the first to file for insolvency against RCom although it was part of the joint lenders forum set up by Indian banks. The Indian lenders did not join the petition filed by the Chinese lender and chose to negotiate with the company for asset sales.

Sources in RCom said an announcement on asset sales was expected any time now.

Indian banks have approved a strategic debt restructuring plan for RCom in which all the dues from the company have been frozen till December 2018.

Strategic debt restructuring permits banks to convert a part of their loans to a company into equity.

RCom, on its part, was to merge its operations with Aircel and sell its cell towers to repay its debts. Neither deal materialised, forcing RCom to close its 2G network and services.

Lenders approved the strategic debt restructuring for RCom barely days before the Reserve Bank of India on June 13 referred 12 large corporate loan defaulters to the NCLT for insolvency resolution.

Like other telecom companies, RCom’s earnings fell after Mukesh Ambani’s Reliance Jio launched free voice services last September. In the past year, Jio has garnered close to 146 million customers as compared to 195 million customers of Idea Cellular and 208 million customers of Vodafone. India's largest mobile services provider, Bharti Airtel, has 285 million customers.

RCom had 80 million customers at its peak and will lose almost 60 per cent of them with the closure of its 2G services.

On October 30, RCom offered banks another plan to restructure its debt that involves converting Rs 7,000 crore of loans into equity, selling spectrum, tower and fibre assets for Rs 17,000 crore, and offloading Rs 10,000 crore of real estate. The company has also reduced its employee count by close to 2,000.