RBI Supersede Reliance Capital Board
The Reserve Bank of India (RBI) on November 29 said it has superseded the board of Reliance Capital due to the defaults of the company in meeting various payment obligations.
Reliance Capital had defaulted on interest payments on loans worth Rs 624 crore drawn from Housing Development Finance Corporation (HDFC) and Axis Bank
Reliance Capital is a Non-Banking Financial Company(NBFC) owned by Anil Ambani in the business of Insurance,Home Finance, broking etc.
RBI has appointed Nageswar Rao Y, former executive director of Bank of Maharashtra as the Administrator of the Company.
RBI regulator of NBFC
Under the Reserve Bank of India act 1934, RBI is the regulator of the NBFC(Non-Banking Finance Companies ) in India.
According to this act if the RBI is satisfied that in the ‘public interest’ or to prevent the affairs of an NBFC being conducted in a manner detrimental to the interest of the depositors or creditors, the board can be superseded for a maximum five years and an administrator can be appointed.
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