October 5, 2021 1:13:02 am
The Reserve Bank of India (RBI) on Monday said that it has superseded the boards of Kolkata-based non-banking financial companies (NBFCs) Srei Infrastructure Finance and Srei Equipment Finance. The two firms will now be referred for insolvency proceedings in the second such instance after Dewan Housing Finance Corporation Ltd (DHFL).
“In exercise of the powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934, the Reserve Bank has today superseded the Board of Directors of Srei Infrastructure Finance Limited (SIFL) and Srei Equipment Finance Limited (SEFL), owing to governance concerns and defaults by the aforesaid companies in meeting their various payment obligations,” it said.
Rajneesh Sharma, former chief general manager at Bank of Baroda, has been appointed the administrator of the two companies under Section 45-IE (2) of the RBI Act. In addition, the RBI appointed a three-member advisory committee to assist the administrator: R Subramaniakumar, former MD & CEO, Indian Overseas Bank, and former administrator for DHFL, TT Srinivasaraghavan, former MD, Sundaram Finance, and Farokh N Subedar, former chief operating officer and company secretary, Tata Sons. Hemant Kanoria, chairman, Srei Infrastructure Finance, said that the company was shocked by the RBI’s move as banks have been regularly appropriating funds from the escrow account they have controlled since November 2020. “We will take all necessary steps as advised by our lawyers in this regard,” Kanoria said.
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