RBI restrains DHFL from taking deposits

The Reserve Bank of India (RBI) has revoked the deposit-taking status of Dewan Housing Finance (DHFL), the first financial services firm to go for bankruptcy proceedings.

The central bank had reclassified DHFL as a non-deposit taking housing finance company, before approving the Piramal Group’s bid to take over it towards the end of the resolution process.

This was revealed in the June 7 order of the NCLT Mumbai approving the ₹35,250-crore bid by Piramal Capital & Housing Finance, forcing a more than 65% haircut on creditors and just ₹1 to NCD holders to whom the firm owes more than ₹45,000 crore.

The changes were made in February 2021, after the banking regulator gave a no-objection to the January 25, 2021 application by R. Subramaniakumar, the DHFL administrator, citing Rule 5 of its FSP (financial services providers) Rules.

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