A corporate insolvency resolution process (IRP) will be initiated by National Company Law Tribunal (NCLT), following Reserve Bank of India (RBI) application, against Dewan Housing Finance Corp. Ltd (DHFL) 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 Rules, 2019.
- RBI has appointed R. Subramaniakumar as administrator for DHFL, will take over the lender’s affairs once his appointment is approved by the NCLT.
- With this, DHFL becomes the first financial services firm to be sent to the bankruptcy tribunal after the government rules for referring financial services providers (FSPs) on 15 November.
- As per the rules, the FSP creditor or debtor cannot approach the tribunal unlike insolvency proceedings for companies from other sectors. FSP firm has to be referred by a regulator, like here DHFL referred by RBI through administrator R. Subramaniakumar.
- As of July 2019, DHFL owed Rs.83,873 crore to banks, the National Housing Board (NHB), mutual funds and bondholders/retail bondholders. Of this secured debt is Rs.74,054 crore and Rs.9,818 crore is unsecured.