Reserve Bank of India superseded the Board of Directors of Reliance

The Reserve Bank of India has today superseded the Board of Directors of M/s Reliance Capital Ltd (RCL) in exercise of the powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934, in light of RCL’s defaults in meeting various payment obligations to its creditors and serious governance concerns that the Board has not been able to address effectively. Under Section 45-IE (2) of the RBI Act, Shri Nageswar Rao Y (Ex Executive Director, Bank of Maharashtra) has been appointed as the company’s Administrator. Under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019, the Reserve Bank will begin the process of resolving the company soon. The Reserve Bank would also file an application with the NCLT in Mumbai to have the Administrator appointed as the Insolvency Resolution Professional.