More Stories

Informist, Thursday, Jan. 30, 2025

 

--RBI: Initiated insolvency resolution process vs Aviom India Housing Fin 

--CONTEXT: RBI superseded Aviom India Housing Fin board on Mon 

 

NEW DELHI – The Reserve Bank of India Thursday filed an application under Section 227 of the Insolvency and Bankruptcy Code, 2016, before the Delhi bench of the National Company Law Tribunal to start insolvency proceedings against Aviom India Housing Finance Pvt. Ltd. Before this, the RBI had used Section 227 to initiate insolvency proceedings against four financial services providers, all of which were resolved successfully.

 

The RBI's application was also filed under Rules 5 and 6 of the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudication Authority) Rules, 2019. As per Rule 5(b)(i), an interim moratorium is started against the company from the date of filing of the insolvency application till its admission or rejection.

 

The explanation to Rule 5(b) states that the tribunal, on the insolvency commencement date, declares a moratorium against the corporate debtor, including execution of any judgment, order, or decree. Transferring, encumbering, or alienating any of its assets also comes under the explanation.

 

Aviom India gave housing loans to individuals for home improvements, renovation, and sanitation. It provided loans to women borrowers who did not have any formal income documentation.

 

On Monday, the central bank had superseded the board of Aviom India because of governance concerns and defaults in meeting various payment obligations, and appointed Ram Kumar, former chief general manager of Punjab National Bank, as administrator. In addition, the RBI Thursday constituted a three-member advisory committee to assist the administrator in the discharge of his duties. The members of the committee are former State Bank of India chief general manager Paritosh Tripathi, former Bank of Baroda chief general manager Rajneesh Sharma, and former PNB Housing Finance managing director and chief executive officer Sanjaya Gupta.

 

According to media reports, National Housing Bank had investigated the books of Aviom India and discovered inflated investments in mutual funds to show a higher cash balance. The company had in November told lenders that it was facing a cash crunch and payments would be delayed.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.