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RBI supersedes boards of Srei cos, to initiate insolvency proceedings

Mint  

The Reserve Bank of India (RBI) has superseded the boards of Srei Infrastructure Finance and Srei Equipment Finance. The apex lender said that the action was taken in light of governance concerns and defaults by the two companies. The insolvency proceedings against the two companies will be initiated soon. The central bank has appointed Rajneesh Sharma, former Chief General Manager, Bank of Baroda as the administrator. The RBI crackdown comes a week after Srei group creditors denied requests by the company to delay legal or other kinds of action to recover dues to the tune of INR 35,000 crore. The Kolkata-based NBFC has been battling a human resource crisis since December last year with nearly 230-250 people leaving the Srei group, as the pandemic-induced economic crisis created an asset-liability mismatch. Subsequently, the lenders of Srei group took control of its finances, in a bid to recover their dues.