The Reserve Bank of India plans to shortly initiate the process of resolution under the Insolvency and Bankruptcy Code for Aviom India Housing Finance, the central bank said in a press release.
This has come as the RBI on Monday superseded the board of directors of Aviom India Housing Finance Private Limited due to governance concerns and defaults in meeting various payment obligations.
It would also apply to the NCLT, New Delhi, for appointing the administrator as the insolvency resolution professional. This decision was based on the recommendation of the National Housing Bank and the central bank has appointed Ram Kumar, ex-CGM of Punjab National Bank as the administrator.
This is an important development as the RBI has superseded the board of the company. In the past, the central bank has done this for companies going through similar crises such as Dewan Housing Finance Corp, Reliance Capital, Shrem Capital and YES Bank.
According to media reports, the company was affected by a severe cash crunch as there were certain fraudulent transactions that had taken place and auditors had pointed out certain discrepancies in the books, which were undergoing investigation.
For the quarter ended June, the company's net profit was Rs 2.97 crore, lower than Rs 6.34 crore a quarter ago and Rs 5.44 crore a year ago.
The company's gross non-performing assets ratio increased 1.01% at the end of the June quarter, higher than 0.97% a quarter ago and 0.63% a year ago. Net NPA ratio also rose to 0.58% as of June end, higher than 0.54% a quarter ago and 0.32% a quarter ago.
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