A day after NCLT admitted RBI’s petition for insolvency resolution of Reliance Capital, the central bank on Tuesday said it has retained the three-member Advisory Committee to assist the newly appointed administrator of the crisis-ridden NBFC.
The Mumbai bench of the National Company Law Tribunal (NCLT) on Monday admitted the Reserve Bank’s plea to initiate insolvency resolution proceedings against Reliance Capital.
Last month, the RBI had superseded Reliance Capital’s board, citing defaults and governance issues.
Upon admission of the petition, the RBI said it has decided that “the three-member Committee shall continue as the Advisory Committee” under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019.
The Advisory Committee shall advise administrator Nageswara Rao Y in the operations of Reliance Capital Ltd during the corporate insolvency resolution process.
Reliance Capital owes its creditors over Rs 19,805 crore, majority of the amount through bonds under the trustee Vistra ITCL India.
The company is the third NBFC to go for resolution under the Insolvency and Bankruptcy Code (IBC) after Dewan Housing Finance (DHFL) and Kolkata-based Srei Group.