Reserve Bank revokes deposit-taking status of Dewan Housing Finance
The Reserve Bank has revoked the deposit-taking status of Dewan Housing Finance (DHFL), the first financial services firm to go in for bankruptcy proceedings, and has reclassified it as a non-deposit taking housing finance company, before approving the Piramal group’s bid towards the end of the resolution process.
The revelation comes in the June 7 NCLT Mumbai order that has approved the Rs 35,250-crore bid by Piramal Capital & Housing Finance, forcing an over 65 per cent haircut on the creditors and just Re 1 to its NCD holders to whom it owes more than Rs 45,000-crore.
On the 14th page of the 86-page NCLT order by H.P. Chaturvedi and Ravikumar Duraisamy, it says DHFL no longer is a deposit taking NBFC but a non-deposit taking one.
The changes were made in February 2021 after the RBI gave a non-objection to the January 25, 2021 application by R. Subramaniakumar, the DHFL administrator, citing Rule 5 of its FSP (financial services providers) Rules.