November 20, 2019 7:28:25 pm
The Reserve Bank of India (RBI) on Wednesday superseded the board of Dewan Housing Finance Corporation Limited (DHFL) and appointed an administrator, owing to concerns of governance and defaults by the housing finance company (HFC) in its payment obligations.
The central bank intends to shortly initiate the process of resolution of the company under the newly formed insolvency and bankruptcy rules, according to a statement by the RBI.
The central bank appointed ex-MD and CEO of Indian Overseas Bank R Subramaniakumar as the administrator of the troubled HFC.
“In exercise of the powers conferred under Section 45-IE (I) of the Reserve Bank of India Act, 1934, the Reserve Bank has today superseded the Board of Directors of Dewan Housing Finance Corporation Limited (DHFL) owing to governance concerns and defaults by DHFL in meeting various payment obligations,” the statement from the RBI read.
The latest development comes after the government last week empowered the RBI to refer stressed non-banking finance companies (NBFCs) and HFCs having assets worth of at least Rs 500 crore to insolvency court, news agency PTI reported.
Last week, the Bombay High Court had allowed the troubled mortgage lender to make payments to banks and NBFCs, which have securitisation arrangements with it.
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