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Dewan Housing Finance Corp. Ltd (DHFL) referred by RBI to the NCLT for insolvency proceedings

Dewan Housing Finance Corp. Ltd (DHFL) referred by RBI to the NCLT for insolvency proceedings

The Reserve Bank of India (RBI) referred Dewan Housing Finance Corp. Ltd (DHFL), which has a debt of ₹83,873 crore, to the National Company Law Tribunal (NCLT) for insolvency proceedings.

  • R. Subramaniakumar, the RBI-appointed administrator for DHFL, will take over the lender’s affairs once his appointment is approved by the NCLT.
  • DHFL is the first financial services firm to be sent to the bankruptcy tribunal after the government notified the rules for referring financial services providers (FSPs).
  • The main difference between financial service providers and insolvency proceedings for companies is that a creditor or the debtor itself cannot go to the tribunal but has to be referred by a regulator. This method is a useful tool for RBI to ensure timely resolution for large NBFCs with significant public investments.
  • According to the new FSP insolvency rules, an interim moratorium will start from the date of filing of the application till its admission or rejection.

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