RBI Greenlights Hinduja Group Directors On Reliance Capital Board

The Reserve Bank of India (RBI) has mandated a considerable distance between IndusInd Bank, operated by the Hinduja Group and Reliance Capital, the debt-ridden company that the conglomerate is acquiring through insolvency proceedings. 

The RBI's condition was outlined in its 17 November letter, approving the appointment of five Hinduja Group representatives as directors on Reliance Capital's board. IndusInd International Holdings (IIHL), a Hinduja Group entity, emerged as the highest bidder in the insolvency proceedings and offered Rs 9,650 crore for Reliance Capital in the auction held in April. 

The RBI's no-objection comes with the stipulation that Reliance Capital must maintain strict arm's length distance in any transaction with IndusInd Bank. Additionally, the central bank mandated that any change in shareholding post-takeover requires prior approval from the RBI. 

The approval is contingent on receiving a copy of the National Company Law Tribunal's order endorsing IIHL's resolution plan. However, the NCLT approval is pending as the Supreme Court is yet to decide on Torrent Investment's plea against the second-round auction by Reliance Capital's lenders. A hearing on Torrent's plea is scheduled for Tuesday.