RBI supersedes boards of Srei Infrastructure, Srei Equipment Finance; to initiate bankruptcy proceedings

The Reserve Bank of India (RBI) on Monday superseded the board of directors of non-banking financial companies Srei Infrastructure Finance Ltd and Srei Equipment Finance Limited and has appointed an administrator.

The Reserve Bank has taken the action due to governance concerns and defaults, adding that it will initiate bankruptcy proceedings against them.

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Banks have debt outstanding of Rs 36,000 crores to the companies of Srei Group and the banks had requested the RBI to dissolve the board and appoint an administrator in view of the condition of the company.

The central bank of India has appointed Rajneesh Sharma, the former Chief General Manager at Bank of Baroda, as administrator.  

A statement released by the RBI read: “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of the powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934, the Reserve Bank has today superseded the Board of Directors of Srei Infrastructure Finance Limited (SIFL) and Srei Equipment Finance Limited (SEFL), owing to governance concerns and defaults by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.”

As per the information, in last quarter State Bank Of India (SBI), UCO Bank, Bank of India had put the loan in the category of NPA, now on the lines of DHFL, there will be a resolution process through NCLT. Also, in the last 6 months, many executives in the senior management of the company have resigned.