Reserve Bank Supersedes DHFL Board

Regulator to initiate insolvency proceedings against firm, appoints former IOB CEO as administrator

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The Reserve Bank of India (RBI) has decided to supersede the board of troubled mortgage financier Dewan Housing Finance Corporation Ltd. (DHFL) and said bankruptcy proceedings would be initiated against the company.

R. Subramaniakumar, former MD and CEO of Indian Overseas Bank, has been appointed as the administrator of the mortgage lender. RBI said the action was taken due to governance concerns and default by the entity in meeting payment obligations.

This is the first instance of RBI superseding the board of a non-banking financial company. The government had changed the law earlier this year to give such powers to the RBI.