The Reserve Bank of India (“RBI”) has, in its capacity as the regulator of non-banking financial companies and under the powers conferred to it pursuant to Section 45-IE (1) of the Reserve Bank of India Act, 1934 (“RBI Act”), superseded the Board of Directors of RCAP (“Board”).

The press release of even date from the RBI also stipulates the following:

1) The step has been taken owing to defaults by RCAP in meeting the various payment obligations to its creditors and serious governance concerns which the Board has not been able to address effectively.

2) Shri Nageswar Rao Y (Ex-Executive Director, Bank of Maharashtra) has been appointed as the Administrator of RCAP under Section 45-IE (2) of the RBI Act.

3) The RBI also intends to shortly initiate the process of resolution of RCAP under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019.

4) The RBI would also apply to the National Company Law Tribunal for appointing the Administrator as the Insolvency Resolution Professional.

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