The Reserve Bank of India (RBI) on Friday appointed a three-member advisory committee to assist R Subramaniakumar, the former Managing Director and CEO of Indian Overseas Bank who recently took over the administrator for Dewan Housing Finance Corporation Ltd (DHFL).
The committee has Rajiv Lall, Non-Executive Chairman of IDFC First Bank Ltd, N S Kannan, Managing Director and CEO of ICICI Prudential Life Insurance Co Ltd, and N S Venkatesh, CEO of the Association of Mutual Funds in India. On Wednesday, the RBI had superseded the DHFL board of director and appointed Subramaniakumar as the administrator in its place in a step towards referring the controversial and debt-laden mortgage lender to a bankruptcy court.
With this, DHFL is set to become the first non-bank lender to be referred to the National Company Law Tribunal (NCLT) under new rules.
On November 15, the government empowered the RBI to refer stressed non-banking finance companies and housing finance companies having assets worth at least Rs 500 crore to the insolvency court.
RBI cited governance concerns and payment defaults by DHFL as the reasons for superseding the board. DHFL is one of India's top defaulters and reportedly owes close to Rs 1 lakh crore to its debtors including banks and mutual funds. The central bank has said that it intends to shortly initiate the process of resolution of the company under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules 2019.
It will also apply to the NCLT for appointing the administrator as the insolvency resolution professional.