Asianet NewsableAsianet Newsable

RBI supersedes debt-ridden Reliance Capital board, to initiate insolvency

The RBI also informed that it will shortly initiate the process of resolution of the company under the Insolvency and Bankruptcy Rules, 2019. 

RBI takes control of debt-ridden Reliance Capital board of directors
Author
Mumbai, First Published Nov 29, 2021, 4:44 PM IST
  • Facebook
  • Twitter
  • Whatsapp

The Reserve Bank of India on Monday superseded the Board of Directors of the debt-ridden Reliance Capital.

In a statement, the RBI said that it was superseding the Board of Directors of Reliance Capital Ltd (RCL) in view of the defaults in meeting multiple payment obligations to its creditors. Besides, the RBI also flagged off serious governance concerns, which it said, the Board had not been able to address effectively.

The Reserve Bank has appointed Nageswar Rao Y, former Executive Director of the Bank of Maharashtra, as the Administrator of the company under Section 45-IE (2) of the RBI Act. The RBI also announced that it will very soon start the process of resolution of the company under the Insolvency and Bankruptcy Rules, 2019. The central bank will also move the National Company Law Tribunal to appoint the administrator as the insolvency resolution professional.

To note, Reliance Capital is the third non-bank lender against whom RBI will initiate insolvency proceedings a special window of the Insolvency and Bankruptcy Code. Earlier, the Board of Directors of two Srei Group entities and Dewan Housing Finance Ltd were also superseded and insolvency proceedings initiated by the RBI. A part of Anil Dhirubhai Ambani Group, RCL had a consolidated debt of Rs 40,000 crore this year. 

A part of Anil Dhirubhai Ambani Group, RCL had a consolidated debt of Rs 40,000 crore this year. In September, Chairman Anil Ambani had announced that Reliance Capital would be able to reduce its consolidated debt by 50 per cent after the successful completion of the resolution process of Reliance Home Finance and Reliance Commercial Finance. 

Close to 90% of Reliance Capital's value is drawn from two insurance businesses -- Reliance General Insurance and Reliance Nippon Life insurance. While Reliance General Insurance is 100 per cent owned by Reliance capital, Reliance Nippon Life Insurance is a joint venture between Reliance Capital and Nippon Life Insurance, Japan with the former having a majority stake.

Also Read

Omicron variant: Centre issues revised guidelines for arrivals from 12 nations

PNB Scam: Fugitive Mehul Choksi claims he may be kidnapped again

Follow Us:
Download App:
  • android
  • ios