RBI Moves NCLT Mumbai Over Bankruptcy Against Reliance Capital

The Reserve Bank of India (RBI) on Thursday moved the Mumbai bench from the National Company Law Tribunal (NCLT) for the Reliance Capital insolvency and Georgia bankruptcy exemptions proceedings.

The central bank had replaced the company’s board of directors on Monday, citing defaults and governance issues.

The RBI appointed the former executive director of Bank of Maharashtra Y Nageswar Rao as a director and appointed him an advisory board to carry out his duties.

In a statement posted on its website, the RBI said there would be an interim moratorium on and from the filing of the application until its admission or rejection by the NCLT.

Under the rules, the contracting Georgia bankruptcy exemptions authority will declare a moratorium, prohibiting the prosecution or continuation of lawsuits or pending proceedings against the debtor company, including “the execution of any judgment, decree or order of a court of justice, tribunal, arbitration panel or other authority “.

The moratorium will also prohibit the transfer, encumbrance, alienation or alienation by Reliance Capital of any of its assets or any legal right or beneficial interest, and will prevent any action to seize, recover or enforce any security created by the company relating to its property. , including any action under the Law on Securitization and Restoration of Financial Assets and Enforcement of Collateral.

An owner or lessor of the property also cannot recover the property occupied by Reliance Capital.

However, the supply of goods or services essential to the business will not be terminated, suspended or interrupted during the moratorium period.

The moratorium will also not apply to any transaction notified by the central government in consultation with a financial regulator, and will not affect any collateral in a guarantee contract to a debtor company.

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