RBI initiates insolvency process against Reliance Capital

The Reserve Bank of India (RBI) on Thursday filed an application for initiation of Corporate Insolvency Resolution Process (CIRP) against Reliance Capital at the Mumbai bench of the National Company Law Tribunal.

The RBI had on November 29 superseded the board of Anil Ambani-promoted Reliance Capital Ltd  in view of payment defaults and serious governance issues. The Reserve bank had also appointed Nageswar Rao Y (former executive director, Bank of Maharashtra) as the administrator of the company.

In a statement on Thursday, the RBI said it has 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 National Company Law Tribunal (NCLT). As the Central Bank  has moved NCLT, an interim moratorium would be applicable on Reliance Capital. The interim moratorium would also be on transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein. As per the Financial Service Providers Insolvency Rules, an interim moratorium begins on and from the date of filing of the application till its admission or rejection.

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