Friday , August 19 2022

The Secretary for Corporate Affairs says RBI may need to open a special window for HFCs


NEW DELHI: India's financing companies (HFC) are facing liquidity pressure, a senior government official said, putting additional pressure on the Reserve Bank of India to provide a special window for the sector requested by the government.

Speaking at the event, Secretary of Corporate Affairs Injeti Srinivas also asked finance companies to test their funding models so that they can target sustainable growth.

ET Reported on Monday that the government had requested a special financing window for real financing companies and housing finance companies, up to 1% of the net liabilities for the time and for the banks' demand.

On the future of leasing infrastructure and financial services (IL & FS), the secretary said selling it at the group level as a live business was at best in the case of the company's stressed solution. However, there are serious issues and the likelihood of such a result is limited, he said.

He said various options were being considered to solve the crisis in IL & FS. "Selling a group entity as a live business is one option.It can be sold to smart vertical or smart assets," Srinivas said.

"But what seems most likely is a combination of all three approaches," he said on the sidelines of the event organized by the Competition Commission of India (CCI).

IL & FS has a debt of 91,000 crore rupees. The company has defaulted on some payment obligations.

"What will be in the interest of the stakeholders, including the public interest, will guide the decision," he said.

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