RBI supersedes board of DHFL over governance concerns

The Reserve Bank of India on Wednesday has superseded the board of embattled Dewan Housing Finance Corporation over the governance concerns and multiple defaults by the shadow bank.

“The Reserve Bank has today superseded the Board of Directors of Dewan Housing Finance Corporation Limited (DHFL) owing to governance concerns and defaults by DHFL in meeting various payment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 central bank said in a statement issued on Wednesday.

The Reserve Bank has also appointed R Subramaniakumar, ex-MD and CEO of Indian Overseas Bank as the Administrator for the entity.

The move comes under the powers bestowed upon RBI under Section 45-IE (I) of the Reserve Bank of India Act, 1934.

The company is also likely to go through the insolvency process, which will be initiated by the Reserve Bank of India.

“The Reserve Bank also 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 and would also apply to the NCLT for appointing the Administrator as the Insolvency Resolution Professional,” the central bank said.