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Satisfied with the progress in the resolution of Reliance Home Finance and Reliance Commercial Finance outside the insolvency laws, the Reserve Bank of India is understood to have rejected a proposal to refer the two companies to the National Company Law Tribunal.
“The RBI is of the view that there has been sufficient progress made in the resolution of these two companies, with good investor response as well so there is no need to transfer these cases to NCLT for resolution,” said a person familiar with the development.
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Banks seek bids for resolution of two companies of Anil Ambani
Resolution process kickstarts for Reliance Commercial Finance and Reliance Home FinanceBank of Baroda, which is the lead bank in the consortium of 20 lenders, had written to the RBI in May seeking resolution of RHF and RCF, through NCLT under Section 227 of the Insolvency and Bankruptcy Code. The section empowers the RBI to refer a financial service provider or a non-banking finance company with asset size of ₹500 crore or more to NCLT for resolution. Separately, the lenders to the two companies, led by Bank of Baroda, had sought bids for resolution plans for the two companies. As many as 13 investors had submitted expression of interest for Reliance Commercial Finance including JM Financial ARC, Edelweiss ARC, UGRO Capital and UV ARC. The last date for submission of bids for Reliance Home Finance is September 15
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Delhi HC stays insolvency case against Anil Ambani
Barred from disposing of his assets in case of personal guarantee given to SBIThe rejection by the RBI to refer the two companies to NCLT comes soon after the Delhi High Court had, on August 18, stayed a move by Bank of Baroda and the consortium of lenders to classify these accounts as fraud. It also restrained them from taking any other coercive action until the next hearing.
Reliance Commercial Finance, which is now re-branded as Reliance Money, is a 100 per cent subsidiary of Reliance Capital and offers small and medium enterprises loans, loans against property, infrastructure financing, agriculture loans, supply chain financing, micro financing, vehicle loans and construction finance.
Reliance Home Finance is a listed housing finance company with assets under management of over ₹14,500 crore.
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