RBI Grade BNABARD ESISEBI
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Context:
“RBI MPC Unpacked: Key Theory Meets Today’s Macro Trends”Tap to play · from the C4S channel
The Reserve Bank of India (RBI) has withdrawn the Corrective Action Plan (CAP) restrictions on Religare Finvest Limited (RFL) with immediate effect, following significant management and governance changes.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.
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