Context:
The Reserve Bank of India (RBI) has withdrawn the Corrective Action Plan (CAP) restrictions on Religare Finvest Limited (RFL) with immediate effect, following significant management and governance changes.
Key Highlights:
- Entity Involved:
- Religare Finvest Limited (RFL), a wholly-owned material subsidiary of Religare Enterprises Limited (REL).
- Sector:
- Operates in the affordable housing finance segment.
- Reason for Withdrawal of CAP:
- Change in management and directors at RFL.
- Overall improvement in regulatory compliance and governance.
- Background:
- RBI had imposed CAP on RFL in January 2018 due to regulatory lapses.
- CAP is a supervisory framework to restore financial health in NBFCs and banks with identified risks.
- Recent Development:
- REL received ₹1,500 crore growth capital through preferential allotment at ₹235 per share.
- The investment was led by the Burman family of Dabur, who are the promoter group of REL.
What is the Corrective Action Plan (CAP)?
- A regulatory tool used by RBI to address deteriorating financial performance and governance issues in financial entities.
- Includes restrictions on lending, capital expenditure, dividend distribution, etc., until improvement is achieved.
TET
