rbi: RBI moves NCLT for RCap insolvency

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MUMBAI: The RBI has filed an application with the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against the Anil Ambani-owned Reliance Capital. The move comes two days after the central bank superseded RCap’s board of directors, citing defaults and serious governance issues.
The RBI said that in terms of the insolvency rules, an interim moratorium shall commence on and from the date of filing of the application till its admission or rejection. If the company is admitted for insolvency, there will be a moratorium on institution of new suits or continuation of pending suits or proceedings against the debtor. The company is also barred from transferring, encumbering, alienating or disposing off any of its assets.
Reliance Capital is the third financial services firm to face insolvency proceedings after the law was amended to include NBFCs.

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