The Reserve Bank of India (RBI) on Thursday filed a plea before the Mumbai Bench of National Company Law Tribunal (NCLT) to initiate insolvency proceedings against Reliance Capital Ltd (RCL).

"The Reserve Bank has today (December 02, 2021) filed an application for initiation of CIRP against Reliance Capital Ltd., under Section 227 read with clause (zk) of sub-section (2) of Section 239 of the Insolvency and Bankruptcy Code (IBC), 2016 read with Rules 5 and 6 of the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudication Authority) Rules, 2019 (“FSP Insolvency Rules”) at the Mumbai Bench of the Hon’ble National Company Law Tribunal," the apex bank said in a press release.

The central bank on November 29 had superseded the board of Reliance Capital Ltd, promoted by Anil Ambani's Reliance Group, in view of the defaults in meeting payment obligations.

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The board has been superseded in view of the defaults by RCL in meeting the various payment obligations to its creditors and serious governance concerns which the Board has not been able to address effectively, the RBI said.

"... The Reserve Bank has (Monday) superseded the Board of Directors of M/s Reliance Capital Ltd (RCL) in view of the defaults by RCL in meeting the various payment obligations to its creditors and serious governance concerns which the Board has not been able to address effectively," the central bank said.

It has also appointed Nageswar Rao Y (ex-executive director, Bank of Maharashtra) as the administrator of the NBFC.

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The company in a statement welcomed the RBI's move to resolve its debt under the Insolvency and Bankruptcy Code. "The Company will cooperate fully with the Administrator appointed by the RBI for the expeditious resolution of its debt in the best interests of all stakeholders," it said.

(Edited by : Jomy Jos Pullokaran)

First Published:Dec 2, 2021 7:26 PM IST