The Reserve Bank of India (RBI) has appointed a three-member advisory committee to assist the administrator in the resolution process of Dewan Housing Finance Corporation (DHFL).
Rajiv Lall, non-executive chairman of IDFC First Bank, NS Kannan, MD & CEO of ICICI Prudential Life Insurance and NS Venkatesh, CEO of Association of Mutual Funds in India, have been named as the members of the committee.
On November 20, RBI had appointed former banker R Subramaniakumar as the administrator after the banking regulator superseded DHFL's board of directors under section 45 IE 5(a) of the RBI Act 1934.
The new norms for resolution of financial entities under the Insolvency and Bankruptcy Code (IBC) also allows the regulator to appoint a committee of advisors to advise the Administrator in the operations of the troubled entity during the resolution process.
Subramaniakumar is former MD & CEO of Indian Overseas Bank. As per the new norms, the administrator will have the same responsibilities and powers as that of an insolvency professional.
DHFL's troubles began in June when it first defaulted on its payments. Lenders to DHFL signed the Inter-creditor agreement as per regulatory norms but the resolution plan devised by them never took off due to non-participation of DHFL's other creditors like mutual funds, fixed deposit holders and bondholders.
Earlier this week, a special window under Section 227 of IBC made way for the resolution of stressed systemically important financial companies, empowering regulators to refer such cases to the National Company Law Tribunal (NCLT).
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