Reliance Capital on Sunday said the Insurance Regulatory and Development Authority of India (Irdai) has cancelled pledge enforcement of Reliance General Insurance Company Ltd’s (RGICL) shares by Credit Suisse and Nippon India MF.

Irdai has directed IDBI Trusteeship Services not to give effect to any encumbrance or transfer or any change in the shareholding of RGICL, according to a BSE filing by Reliance Capital (Rel Cap). After the Irdai direction, 100 per cent shareholding in RGICL stands restored to Rel Cap, it added.

The regulator also said its prior approval was not taken for the transfer. Irdai added that the unauthorised transfer also violates FDI regulations.

The Irdai action will benefit all lenders of Reliance Capital as the sale proceeds of RGICL’s shares will go to all lenders and not just Credit Suisse and Nippon India MF.

The sale of RGICL's shares is expected to fetch Rs 6,000 crore for the Rel Cap lenders, which is almost 40 per cent of the total secured debt. Rel Cap has a 100 per cent shareholding in RGICL.