Money & Banking

DHFL default: RBI to ensure financial stability

PTI Mumbai | Updated on June 06, 2019

The central bank is closely monitoring the developments in the NBFC sector and housing finance companies and will ensure that financial stability is maintained, governor Shaktikanta Das said on Thursday.

The comments come following the bond defaults by mortgage lender DHFL on June 4, which led to a slew of rating downgrades of the company. The stock lost more than 20 per cent Thursday.

Read also: DHFL shares plunge over 18 per cent as ICRA, Crisil downgrade ratings

“We have been closely monitoring the performance and developments in the NBFC and HFC sectors,” Das told reporters during the customary post-RBI policy conference.

Stating that the central bank is committed to have a robust NBFC sector, Das said, “the RBI will not hesitate to take any measure to ensure financial stability in the sector.”

After DHFL’s bond repayment default, rating agencies Crisil and ICRA had on Wednesday downgraded rating on its ₹ 850-crore commercial paper to ‘default’ from ‘A4’

The rating revision factors in further deterioration in DHFL’s liquidity profile and delays in meeting scheduled debt obligation on June 4, 2019, ICRA had said in a note.

The company has commercial paper worth ₹ 750 crore maturing in June with the first repayment on June 7.

Published on June 06, 2019

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor