The Reserve Bank of India (RBI) has given the green signal to the Piramal group to acquire Dewan Housing Finance Ltd (DHFL).

The banking regulator is learnt to have given its nod under the “fit and proper criteria”. Lenders to DHFL will now move the National Company Law Tribunal (NCLT) to get its clearance for the resolution plan.

Last month, the committee of creditors (CoC) had approved the resolution plan submitted by Piramal group firm Piramal Capital and Housing Finance Ltd.

“We understand that the RBI has approved the DHFL resolution plan from Piramal Capital and Housing Finance, submitted by the CoC,” Piramal Group said in a statement.

The central bank had referred DHFL to NCLT in November 2019 for insolvency proceedings. DHFL was the first finance company to be referred to the NCLT by the RBI using special powers under Section 227 of the Insolvency and Bankruptcy Code. Before that, the company’s board was superseded and R. Subramaniakumar was appointed as the administrator. He is also the resolution professional under IBC.

While the bidding process for DHFL began in October 2020, it ended in December 2020 with the CoC voting ending last month. The resolution plan submitted by Piramal Capital and Housing Finance secured 94 per cent votes against the minimum 66 per cent required.

The total consideration to be paid by the group stands at Rs 34,250 crore, which includes an upfront cash payment of Rs 14,700 crore and deferred component through non-convertible debentures (NCDs) of Rs 19,550 crore.

Though its offer was lower than that of Oaktree, the higher upfront amount by the Piramal group swung the resolution plan in its favour.

The acquisition is in line with the group’s strategy to diversify the loan book and increase its granularity.

Under the Piramal group’s plan, current shareholders of DHFL will get nothing. It now plans to merge its financial services business with DHFL once all the approvals are in place.