New Delhi: The Reserve Bank of India (RBI) on Monday dismissed the board of directors of non-bank financial institutions Srei Infrastructure Finance Ltd (SIFL) and Srei Equipment Finance Ltd (SEFL) due to management concerns and mistakes. The central bank also said it would launch bankruptcy proceedings against the companies.
“The Reserve Bank of India today overtook the Board of Directors of SIFL and SEFL due to management concerns and mistakes made by the aforementioned companies in discharging their various fee obligations,” the RBI said in a statement.
The Bankruptcy and Bankruptcy (Application to the Bankruptcy and Money Laundering Procedures and Judicial Commission of Financial Service Providers) Rules, RBI plans to expedite the settlement of the above two NBFCs by 2019 to appoint the Administrator as the Bankruptcy Resolution Specialist, ”it added.
Rajneesh Sharma, former general manager of Bank of Baroda, has been appointed manager of non-bank financial institutions, the central bank said in a statement.
Srei Group owes about Rs 18,000 crore to about 15 lenders.
Srei has total liabilities of Rs 18,000 crore on bank loans and nearly Rs 10,000 crore on external business loans and securities. There are a lot of tangible assets, including jury awards.
As the economic crisis triggered by the epidemic has created asset-liability inconsistencies, the NBFC has been pulling out of the Sri Group of about 230-250 people since December last year in response to the human resource crisis.
The Srei Group mainly serves the MSME and infrastructure sectors.
Shares of Sray Infra rose 2.12% to Rs. Was 8.66.