DHFL becomes first financial services firm to be taken to NCLT
PrintListen to this Article
0:00
0:00
The Reserve Bank of India (RBI) on Friday referred Dewan Housing Finance Corp. Ltd (DHFL), which has a debt of Rs.83,873 crore, to the National Company Law Tribunal (NCLT) for insolvency proceedings.
“The Reserve Bank has today filed an application for initiation of corporate insolvency resolution process against DHFL under Section 227 read with clause (zk) of sub-section (2) of Section 239 of the Insolvency and Bankruptcy Code (IBC), 2016 read with Rules 5 and 6 of the Insolvency and Bankruptcy Rules, 2019," the central bank said in a statement.
R. Subramaniakumar, the RBI-appointed administrator for DHFL, will take over the lender’s affairs once his appointment is approved by the NCLT.
DHFL is the first financial services firm to be sent to the bankruptcy tribunal after the government notified the rules for referring financial services providers (FSPs) on 15 November. Unlike insolvency proceedings for companies from other sectors, an FSP creditor or debtor cannot approach the tribunal—the firm has to be referred by a regulator.
Under the new powers granted to RBI in the Union budget, it can take over administration of privately-held financial services companies. It can also remove auditors, call for an audit of any group company, and have a say on the compensation of the top management of an NBFC.
On 22 November, RBI set up a three-member advisory committee to assist Subramaniakumar in order to ensure that the debt-laden company’s asset quality does not worsen. This came after its decision to supersede DHFL’s board on 20 November.
According to the RBI order cited by DHFL in a 20 November regulatory filing, a statutory inspection of the mortgage lender conducted by the National Housing Bank with reference to its position as of 31 March 2018 revealed serious deterioration in its finances.
According to the new FSP insolvency rules, an interim moratorium will start from the date of filing of the application till its admission or rejection.
DHFL had public deposits of Rs.6,188 crore as on 6 July, down from Rs.10,166.72 crore as on 31 March 2018. #casansaar (Source - LiveMint)
“The Reserve Bank has today filed an application for initiation of corporate insolvency resolution process against DHFL under Section 227 read with clause (zk) of sub-section (2) of Section 239 of the Insolvency and Bankruptcy Code (IBC), 2016 read with Rules 5 and 6 of the Insolvency and Bankruptcy Rules, 2019," the central bank said in a statement.
R. Subramaniakumar, the RBI-appointed administrator for DHFL, will take over the lender’s affairs once his appointment is approved by the NCLT.
DHFL is the first financial services firm to be sent to the bankruptcy tribunal after the government notified the rules for referring financial services providers (FSPs) on 15 November. Unlike insolvency proceedings for companies from other sectors, an FSP creditor or debtor cannot approach the tribunal—the firm has to be referred by a regulator.
Under the new powers granted to RBI in the Union budget, it can take over administration of privately-held financial services companies. It can also remove auditors, call for an audit of any group company, and have a say on the compensation of the top management of an NBFC.
On 22 November, RBI set up a three-member advisory committee to assist Subramaniakumar in order to ensure that the debt-laden company’s asset quality does not worsen. This came after its decision to supersede DHFL’s board on 20 November.
According to the RBI order cited by DHFL in a 20 November regulatory filing, a statutory inspection of the mortgage lender conducted by the National Housing Bank with reference to its position as of 31 March 2018 revealed serious deterioration in its finances.
According to the new FSP insolvency rules, an interim moratorium will start from the date of filing of the application till its admission or rejection.
DHFL had public deposits of Rs.6,188 crore as on 6 July, down from Rs.10,166.72 crore as on 31 March 2018. #casansaar (Source - LiveMint)
Category : Insolvent Professional | Comments : 0 | Hits : 483
The National Company Law Tribunal (NCLT) on Monday ordered insolvency proceedings against media baron Subhash Chandra on a plea filed by Indiabulls Housing Finance. A two-member Delhi b...
Also Read -
IBBI invites suggestions to simplify, ease & reduce cost of compliance of Regulations notified under IBC
The Insolvency and Bankruptcy Board of India (IBBI) invites suggestions/comments from public and regulated entities, on the Regulations for simplifying, easing and reducing cost of compliance. The ...
Also Read -
Govt considers giving financial creditor status to insurers issuing surety bond during resolution
To make surety bond business more attractive, the government is looking at making relevant changes in the Insolvency and Bankruptcy Code (IBC) to consider insurers as financial creditor in case of def...
Comments