Srei Group promoters move Bombay HC against RBI action on SIFL, SEFL

The RBI on Monday had superseded the board of directors of SIFL and SEFL, owing to governance concerns and defaults by the companies in meeting payment obligations. Bank of Baroda's former chief general manager Rajneesh Sharma has been appointed as the administrator of the two companies.

It intends to initiate the process of resolution of the two NBFCs under the Insolvency and Bankruptcy Rules, 2019, the regulator said. The RBI also said it would apply to the NCLT for appointing the administrator as the insolvency resolution professional.

This is only the second time in as many years that RBI is referring entities for the resolution process under the Insolvency and Bankruptcy Code (IBC) after taking the first-ever such step in the case of DHFL back in 2019.

Also Read: Inside RBI's decision to supersede SREI Group Companies' Boards

A Srei group spokesperson said SIFL was "shocked" by the RBI's move as banks have been regularly appropriating funds from the escrow account they have controlled since November 2020, and added that necessary steps as advised by its lawyers will be taken.