New Delhi, Reserve Bank of India (RBI) on Thursday filed application for initiation of Corporate Insolvency Resolution Process (CIRP) against Reliance Capital Ltd under bankruptcy law at the Mumbai bench of National Company Law Tribunal (NCLT).
"As per Rule 5 (b) (i) of the FSP Insolvency Rules, an interim moratorium shall commence on and from the date of filing of the application till its admission or rejection," the RBI said in a statement.
Days back, the central bank had superseded the board of troubled financial services company citing payment defaults and governance issues.
The RBI has appointed Nageswara Rao Y, a former executive director of Bank of Maharashtra, as the company’s administrator.
Reliance Capital has welcomed the RBI's move to resolve the company’s debt in accordance with the Insolvency and Bankruptcy Code, 2016.
As per the company's regulatory filing, Reliance Capital has no outstanding loans from banks and about 95% of its debt is in the form of debentures.
"The complexity of litigation initiated by certain secured and unsecured lenders, resulting in the pendency of over 10 cases in various fora, including the Hon’ble Supreme Court, Mumbai High Court, Delhi High Court and DRT, has effectively stalled the resolution of the Company’s debt, despite its best efforts for the past over 2 years," Reliance Capital had said on November 29.
The company noted that it owns profitable and valuable operating businesses through its 100 per cent shareholding in RGIC and 51 per cent shareholding in RNLIC (a JV with Nippon Life Co. of Japan).