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Insolvency plea against DHFL
Why is it in the news?
- The Reserve Bank of India (RBI) has filed an insolvency application against troubled mortgage lender Dewan Housing Finance Corporation Ltd. (DHFL) at the National Company Law Tribunal.
More in the news
- This will be the first instance of bankruptcy proceedings against a financial services company.
- Government had issued a notification earlier this month specifying the categories of financial service providers that can be taken up for resolution under the generic framework of the Insolvency and Bankruptcy Code.
- So far the financial service providers were kept out of bankruptcy code.
- About Insolvency and Bankruptcy Code:
(1) The Code offers a uniform and comprehensive insolvency legislation encompassing all companies, partnerships and individuals.
(2) It suggests two options:
(3) Restructuring if the firm is viable.
(4) Liquidation if the firm is not financially viable.
Source
The Hindu.