New Delhi: The Reserve Bank of India (RBI) on Wednesday superseded the Board of Directors of Dewan Housing Finance Corporation Limited (DHFL) to initiate insolvency proceedings, citing governance concerns and company defaults.

In a statement issued earlier today, the RBI said that it would refer DHFL for the insolvency and placed the non-banking finance company under an administration to look into the process of resolution.

“In exercise of the powers conferred under Section 45-IE (I) of the Reserve Bank of India Act, 1934, the Reserve Bank has today superseded the Board of Directors of DHFL owing to governance concerns and defaults by DHFL in meeting various payment obligations,” the statement read.

The central supervisory bank appointed the R. Subramaniakumar, ex-MD and CEO of Indian Overseas Bank, as the Administrator under Section 45-IE (2) of the Reserve Bank of India Act, 1934.

The RBI also intends to shortly begin the liquidation process of the company under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 and would also apply to the NCLT for appointing the administrator, the central bank said.

DHFL has been suffering from immense financial stress that led to the housing bank become one of the country’s top defaulters with a debt valued at nearly Rs 1 lakh crore. If reports are to believed, DHFL owes over Rs 38,000 crore to other banks, while it has over Rs 85,000 liabilities in total including those in banks, mutual funds, pension funds, National Housing Bank, depositors and so on.