RBI may refer DHFL to bankruptcy court: Report

RBI may refer DHFL to bankruptcy court: Report

A woman walks past a signboard of Dewan Housing Finance Corporation Ltd. (DHFL) outside its office on the outskirts of Mumbai. (Reuters photo)

The Reserve Bank of India (RBI) may refer debt-laden Dewan Housing Finance (DHFL) and Altico Capital to the bankruptcy court, according to a report by Mint. 

The RBI is holding talks with lenders of DHFL and Altico before referring them to insolvency, people aware of the development told the newspaper.

If the RBI makes an insolvency reference, DHFL and Altico Capital will become the first set of non-banking finance companies (NBFCs) to be sent to the bankruptcy court.

As per the changes announced by the corporate affairs ministry to the Insolvency and Bankruptcy Code (IBC) on November 18, the RBI can move resolution of financiers with assets of at least Rs 500 crore under an amendment to bankruptcy norms.

DHFL lenders are expected to discuss the matter on November 25, the report said.  “While DHFL is almost certain to be referred to NCLT (National Company Law Tribunal), there is still some ambiguity over Altico," a source told the newsreport.

The beleaguered home financier DHFL owes Rs 83,873 crore as of July 6, 2019, to banks, the National Housing Board, mutual funds and bondholders, including retail bondholders.