RBI Approves Resolution Plan for Debt-Ridden Reliance Capital

The Reserve Bank of India (RBI) on Friday approved the resolution plan for debt ridden Reliance capital enabling the Hinduja Group firm, IndusInd International Holdings Ltd. (IIHL) to take over the company.

This is to inform you that the Administrator of Reliance Capital Limited is in receipt of “No objection” video letter dated November 17, 2023, from the Reserve Bank of India, the company said in a regulatory filing.

IIHL had won the second round of auction concluded in April by offering Rs.9650 crore to take over the debt-ridden Reliance Capital. This followed the RBI”s move to replace the board of Reliance Capital citing payment defaults and serious governance issues.

Later the central bank appointed Nageswara Rao Y as the administrator in relation to the Corporate Insolvency Resolution Process (CIRP) of the firm.

Reliance Capital is the third large non-banking financial company (NBFC) which has been facing RBI”s bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC). The other two were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL).

Following this, the Central bank filed an application of initiation of CIRP against the company at the Mumbai bench of the National Company Law Tribunal,

In February last year, the RBI-appointed administrator invited expressions of interest for the sale of Reliance Capital. according to Press Trust of India.

In February last year, Nageswara Rao Y had invited expressions of interest for the sale of Reliance Capital.