RBI supersedes DHFL board; may soon refer mortgage lender for insolvency proceedings

By: |
Updated: Nov 20, 2019 6:45 PM

The board of Dewan Housing Finance (DHFL) has been superseded by the Reserve Bank of India (RBI) on governance-related concerns and payment defaults.

SBI, DHFL loan pools, Macquarie Capital Securities, ICICI Bank, DHFL assets, Icra, retail pooled assetsThe troubled company will shortly be referred for insolvency proceedings, RBI also said.

The board of Dewan Housing Finance (DHFL) has been superseded by the Reserve Bank of India (RBI) on governance-related concerns and payment defaults. “The Reserve Bank has today superseded the Board of Directors of Dewan Housing Finance Corporation (DHFL) owing to governance concerns and defaults by DHFL in meeting various payment obligations,” RBI said in a statement on Wednesday. R Subramaniakumar, ex-MD and CEO of Indian Overseas Bank, has been appointed as the administrator of the financially-troubled mortgage lender, the RBI also said. The troubled company will shortly be referred for insolvency proceedings, RBI also said.

The announcement comes after the government last week empowered the RBI to refer stressed NBFCs and HFCs having assets worth of at least Rs 500 crore to insolvency court.“The Reserve Bank also intends to shortly initiate the process of resolution of the company under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 and would also apply to the NCLT for appointing the Administrator as the Insolvency Resolution Professional,” it added.

Also read: Rs 2000 notes being hoarded less and less; could this be real reason

Meanwhile, a few days back, the Bombay High Court allowed troubled mortgage lender to make payments to banks and NBFCs, which have securitisation arrangements with it. Seven lenders, led by State Bank of India (SBI), had filed an intervention plea seeking vacation from an earlier order. Other petitioners included Union Bank of India, HDFC Bank, and Indian Overseas Bank The Bombay HC had earlier restrained DHFL from making payments to any of its secured/unsecured creditors, including the payments to any fixed deposit holders, on October 10, following a petition filed by mutual funds. Justice AK Menon said in his order:

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1UPI volumes fall in these two states, even as jump in all other states; sharpest rise in 7 sisters
2US SEC not to take action against ICICI Bank in provisioning probe
3ICICI Pru Q2 net profit flat at Rs 303 crore on higher tax outgo