RBI supersedes Reliance Capital board, to start bankruptcy proceedings against firm

India’s central bank said on Monday it will initiate bankruptcy proceedings against Reliance Capital Ltd and superseded the non-banking financial company’s board on governance concerns.

The Reserve Bank of India (RBI) appointed Nageswar Rao Y, a former executive director at Bank of Maharashtra Ltd, as the administrator of Reliance Capital.

In June 2019 auditors raised several red flags around Reliance Capital`s fourth-quarter results, including a lack of clarity in accounting methodology.

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The company has since then failed to make several debt obligation payments.

The RBI`s move against Reliance Capital follows a similar step taken against Srei Infrastructure Finance Ltd and Srei Equipment Finance Ltd earlier this year.

Reliance Capital did not immediately respond to a request for comment.