Lenders of Reliance Capital expressed concern over the slow progress of the resolution plan, said this

Lenders of debt-ridden Reliance Capital (RCap) have expressed concern over the slow progress of the resolution plan. He has asked Hinduja Group arm IndusInd International Holdings Ltd to expedite the process of obtaining necessary regulatory approvals and stick to the resolution plan deadline of May 27. In a meeting with senior officials of IndusInd International Holdings (IIHL) in Mumbai on Friday, RCap’s lenders said the company has to pay them Rs 9,650 crore by the said date, a source said.

Instructions to implement resolution plan within 90 days

It is noteworthy that the National Company Law Tribunal (NCLT), Mumbai, while approving the resolution plan on February 27, had directed IIHL to implement the resolution plan within 90 days i.e. by May 27. As per the approved resolution plan, IIHL has to make an upfront payment of Rs 9,650 crore to RCap’s lenders. According to sources, lenders expressed concern over the slow progress of implementation of the RCAP resolution plan, as IIHL is yet to receive key approvals from insurance regulator Irdai on the resolution plan. IRDAI has raised several questions and concerns on the proposed corporate structure for transfer of RCap’s insurance business to IIHL and the company is yet to address those concerns.

IRDA approval important

IRDAI’s approval is crucial for the transfer of the insurance business of Reliance Capital i.e. Reliance General Insurance and Reliance Nippon Life Insurance to IIHL. The RBI approval for transfer of RCAP’s business to IIHL also expires on May 17. The central bank had given this approval on November 17, which was valid only for six months. If IIHL fails to complete the resolution process within the deadline, it will have to apply to the RBI again for fresh approval.