New Delhi: The Reserve Bank of India (RBI) on Monday superseded the Board of Reliance Capital because of the defaults of the company in meeting various payment obligations.


Nageswar Rao Y (former executive director, Bank of Maharashtra) has been appointed as the administrator of the company.


"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of the powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934, the Reserve Bank has today superseded the Board of Directors of M/s Reliance Capital Ltd (RCL) in view of the defaults by RCL in meeting the various payment obligations to its creditors and serious governance concerns which the Board has not been able to address effectively," said RBI in a statement.


The Reserve Bank will shortly initiate the company's resolution process under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019.


Reliance Capital has total debt of Rs 21,781.01 crore, including accrued interest up to October 31, 2021, and defaulted on interest servicing of Rs 5.48 crore on a term loan of Rs 624.61 crore.


The Reserve Bank will shortly initiate the process of resolution of the company under the Insolvency and Bankruptcy Rules, 2019. The central bank will also apply to the NCLT, Mumbai Bench, for appointing an administrator as the Insolvency Resolution Professional.


A Reliance Capital spokesperson was not immediately available for comments.


"The delay in debt servicing is due to the prohibition on the company from making any payment to secured or unsecured creditors and to dispose of, alienate, encumber either directly or indirectly or otherwise part with the possession, of any assets except in the ordinary course of business such as payment of salary and statutory dues, vide Orders dated December 3, 2019, and December 5, 2019, passed by the Hon'ble Debts Recovery Tribunal, Orders dated November 20, 2019, and March 15, 2021, passed by the Hon'ble Delhi High Court, and Orders dated November 28, 2019, November 4, 2020, and March 5, 2021, passed by the Hon'ble Bombay High Court. In view of the above the Company is unable to proceed with its asset monetization resulting in a delay in its debt servicing," the company said in a regulatory filing to the exchanges.


On Monday, Reliance Capital shares on the BSE closed down 4.99 per cent at Rs 19.05 in a firm Mumbai market, valuing the company at Rs 481 crore.