Reserve Bank of India said on Monday it will initiate bankruptcy proceedings against Srei Infrastructure Finance Ltd and Srei Equipment Finance Ltd, and superseded the non-banking financial companies' boards on governance concerns and defaults.
RBI also appointed Rajneesh Sharma, former chief general manager of Bank of Baroda, as the administrator of the companies.
Both the NBFCs were under the RBI's radar over the last couple of years, with the central bank flagging in July lending by Srei to certain parties probably related to the company, and appointing an auditor for doing a special audit on Srei Equipment Finance.
Srei Infrastructure Finance's former chief executive Rakesh Kumar Bhutoria had resigned recently, citing "salary payment issues."
Srei did not immediately respond to Reuters' request for comments.
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