The Reserve Bank of India (RBI) has filed an application before the National Company Law Tribunal (NCLT) to initiate the Corporate Insolvency Resolution Process (CIRP) against Aviom India Housing Finance Private Limited under the Insolvency and Bankruptcy Code (IBC), 2016. The petition, filed at the NCLT’s New Delhi Bench, seeks to resolve financial distress at the housing finance company through a structured insolvency process.
The RBI’s action is in accordance with Section 227 of the IBC, which grants it the authority to initiate insolvency proceedings against financial service providers. The move also aligns with the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudication Authority) Rules, 2019, which outline the process for handling financial firms under stress.
Following the filing of the application, an interim moratorium has come into effect as per the provisions of the IBC. This prevents the institution or continuation of legal proceedings against the company, prohibits the transfer or disposal of assets, and restricts enforcement of security interests until the tribunal either admits or rejects the petition. However, the supply of essential goods and services to the company will remain uninterrupted during this period.
The RBI’s decision to trigger insolvency proceedings reflects its growing scrutiny of non-banking financial companies, particularly in the housing finance sector. The case will now be reviewed by the NCLT, which will determine the next course of action in the resolution process.