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The Reserve Bank of India (RBI) has superseded the board of Reliance Capital as the company defaulted on various payment obligations to its creditors and the company will go under the insolvency process soon.

"In exercise of the powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934, the Reserve Bank has today superseded the Board of Directors of M/s Reliance Capital Ltd (RCL) in view of the defaults by RCL in meeting the various payment obligations to its creditors and serious governance concerns which the Board has not been able to address effectively," RBI said in a statement.

RBI said there were serious governance concerns which the Board has not been able to address effectively. The Central Bank has also appointed former Bank of Maharashtra director Y Nageswar Rao as the administrator of the company.

The Reserve Bank said it will shortly initiate the process of resolution of the company under the Insolvency and Bankruptcy code.

The Central Bank will also apply to the NCLT for appointing the administrator as the Insolvency Resolution Professional.

Reliance Capital will become the third non-banking financial company to go under the insolvency procedure after DHFL and Srei Group companies.

A part of Anil Dhirubhai Ambani Group, Reliance Capital has repeatedly failed to repay its debt obligations.

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