The Reserve Bank of India has superseded the board of directors of Reliance Capital Ltd (RCL) in view of the defaults by the company in meeting the various payment obligations to its creditors and serious governance concerns.
Consequently, Nageswar Rao Y, former Executive Director of the Bank of Maharashtra, has been appointed as the administrator of RCL.
RBI will shortly initiate the process of resolution of the company under the Insolvency and Bankruptcy Rules, 2019. RBI will also apply to NCLT, Mumbai, for appointing the administrator as the Insolvency Resolution Professional.
Reliance Capital is the third financial services company to face the insolvency proceedings after the law was amended to include the NBFCs. RBI initiated the insolvency proceedings against the SREI group at the beginning of November. Earlier, insolvency proceedings were initiated against DHFL.
