The RBI replaces the board of directors of the borrowers due to serious administrative concerns.
Reliance Capital reported a cumulative loss of Rs 1,649 crore.
The Reserve Bank of India (RBI) on Monday replaced the lender’s committee launched by the Anil Dhirubhai Ambani Group, citing the loan shortfall and ‘serious administrative concerns’ that it failed to address. The NBFC does not handle it. Reliance Capital is facing bankruptcy lawsuits; in the interim Nageswar Rao Y, former chief executive at the Bank of Maharashtra will be the manager.
In a press release on Saturday, Reliance Capital said the total amount of financial debts, including short- and long-term debts were Rs 21,781.01 crore. This amount includes interest incurred up to October 31. Analysts estimate the combined debt to the NBFC to be close to Rs 40,000 crore. Among his debts are several government banks
Hit by the water crisis after Infrastructure Leasing & Financial Services defaulted on debts, the lending company reported a loss of Rs 253 crore for the September quarter. In statements to the account, Reliance Capital stated that it is unable to repay debts to borrowers and creditors where several borrowers have filed lawsuits against the company. In the quarter ended March 2021, Reliance Capital reported a net loss of Rs 1,649 crore.
The Company has gone bankrupt this year and last year, which indicates material instability could cause a great deal of doubt as to the Company’s ability to continue as a concern. The Company is moving towards fulfilling its obligations by securing the time to finance its assets with respect to Debenture Trustee (Vistra) & Debenture holder.,” the revelation said.
The central bank said it will soon begin the decision process for Reliance Capital under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Act, 2019.
The RBI will also apply to NCLT Mumbai for the appointment of the manager as an expert on insolvency, the central bank said.
Reliance Capital is the third non -bank behind Dewan Housing Finance Corporation and SREI Group companies to have RBI change their committees.
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