Money & Banking

Reserve Bank initiates insolvency proceedings against Reliance Capital

Our Bureau | | | Updated on: Dec 02, 2021
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The action comes after the RBI superseded the board of Reliance Capital

The Reserve Bank of India on Thursday filed an application for initiating insolvency proceedings against Reliance Capital at the Mumbai Bench of the National Company Law Tribunal.

“The Reserve Bank has today (December 2, 2021) filed an application for initiation of CIRP against Reliance Capital Ltd, under Section 227 read with clause (zk) of sub-section (2) of Section 239 of the Insolvency and Bankruptcy Code (IBC), 2016 read with Rules 5 and 6 of the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudication Authority) Rules, 2019 (“FSP Insolvency Rules”) at the Mumbai Bench of the National Company Law Tribunal,” the RBI said.

An interim moratorium shall commence on and from the date of filing of the application till its admission or rejection, it further said.

The action comes after the RBI superseded the board of Reliance Capital on November 29 and appointed Nageswara Rao Y, ex-Executive Director, Bank of Maharashtra, as the administrator of the company.

It has also constituted a three-member Advisory Committee to assist the Administrator on November 30.

Reliance Capital scrip fell by nearly five percent to close at ₹16.35 apiece on BSE.

This in the third NBFC against which the RBI has initiated insolvency proceedings, with the first being Dewan Housing Finance Corporation Ltd and the second being Srei Ifra Finance and Srei Equipment Finance.

Published on December 03, 2021

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