The National Company Law Tribunal said Monday that Reserve Bank of India has applied for insolvency resolution process CIRP against debt-ridden Reliance Capital.
The RBI had filed an application for the same at the Mumbai bench of the NCLT last week.
The Reserve Bank had superseded the board of Anil Ambani-promoted Reliance Capital Ltd RCL on 29 November due to payment defaults and serious governance issues. The central bank had also appointed Nageswar Rao Y former executive director, Bank of Maharashtra, as the administrator of the company.
In a statement, the central bank said it had filed an application for initiation of CIRP against Reliance Capital Ltd under various sections of the Insolvency and Bankruptcy Code IBC before the Mumbai bench of the NCLT. The RBI has moved NCLT and an interim moratorium will be applicable on Reliance Capital. The interim moratorium would include transferring, encumbering, alienating or disposing of any assets of the corporate debtor, or any legal right or beneficial interest therein.
An interim moratorium starts on and from the date of filing of the application until its admission or rejection, as per the Financial Service Providers Insolvency Rules. This is the third large NBFC against which the central bank has initiated bankruptcy proceedings under the IBC recently.
In September, Reliance Capital informed shareholders that the company's debt was Rs 40,000 crore, according to the Annual General Meeting of Reliance Capital, a company with a consolidated debt of Srei Group NBFCs and Dewan Housing Finance Corporation DHFL. The company had a consolidated loss of Rs 1,156 crore for the second quarter of this fiscal against Rs 6,001 crore income. The company has a loss of Rs 9,287 crore during the year 2020 -- 21 and a total income of Rs 19,308 crore.
In a separate filing to stock exchanges, Reliance Capital said the Reserve Bank filed applications for the initiation of corporate insolvency resolution process against the company under IBC. It said an interim moratorium has started on and from the date of filing the application until its admission or rejection.