RBI suspends the board of Srei Infrastructure Finance, Srei Equipment Finance

According to officials, the Reserve Bank will soon initiate the process of resolution of the two companies of Srei Group under the Insolvency and Bankruptcy Code, writes ETV Bharat's Krishnanand Tripathi.

New Delhi: Banking sector regulator Reserve Bank of India Monday superseded the board of two of Srei Group companies, Srei Infrastructure Finance and Srei Equipment Finance Limited as the two companies defaulted on payments. The Banking and NBFC regulator was also concerned about the management of these two companies and will approach the National Company Law Tribunal (NCLT) for the resolution.

“In exercise of the powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934, the Reserve Bank has today superseded the Board of Directors of Srei Infrastructure Finance Limited (SIFL) and Srei Equipment Finance Limited (SEFL), owing to governance concerns and defaults by the aforesaid companies in meeting their various payment obligations,” said the Reserve Bank.

The Reserve Bank has appointed Bank of Baroda’s former Chief General Manager Rajneesh Sharma as the administrator of these two non-banking finance companies.

According to officials, the Reserve Bank will soon initiate the process of resolution of the two companies of Srei Group under the Insolvency and Bankruptcy Code.

The process will be initiated under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019.

The Reserve Bank will apply to the National Company Law Tribunal (NCLT) for appointing the administrator as the Insolvency Resolution Professional.