Money & Banking

DHFL FD holders may get a quarter of their funds repaid

Surabhi Mumbai | Updated on November 30, 2020 Published on November 30, 2020

Fixed deposit holders of Dewan Housing Finance Corporation Ltd (DHFL) could get back about a quarter of their investments under the proposed resolution plans, but many point out that it would be too little, too late.

“Recent discussions have indicated that FD holders will get atleast some repayment of their investments. It has been indicated that they may be repaid as much as 25 per cent of the amount invested,” said a person familiar with the development.

“The SLR ratio is only 13 per cent so that is the amount they can get, irrespective of what the resolution amount is,” the person further said.

Life savings ‘stuck’

Over 55,000 FD holders of the ailing housing finance company have been left in the lurch with nearly ₹5,3,75 crore of claims. Of this, about ₹2,200 crore is of retail FD holders, who point out that a large part of their life savings are now stuck.

Under the Insolvency and Bankruptcy Code (IBC), secured creditors have to be paid first before other unsecured creditors.

However, discussions have now started in the Committee of Creditors of DHFL to look at some repayment to bond holders and fixed deposit holders.

“The CoC and Administrator, as well as bidders, have been discussing some kind of repayment. The FD holders are willing to even take deferred payment rather than full upfront payment but the full amount should be repaid,” they added.

Alternatively, a section of the FD holders are hoping that the National Company Law Tribunal will rule in favour of the National Housing Board, which has sought a higher share in the resolution of DHFL.

“A favourable verdict for NHB at the NCLT will also help fixed deposit holders. Under the NHB Act, depositors can get 100 per cent refund in case a company goes under liquidation. We are also willing to move the Supreme Court to get justice,” said Ishan Chakraborty, who is also the National Convener of DHFL Ltd FD Holders Group Pan India, stressing that it is a crucial matter of the life savings for the retail FD holders of DHFL.

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Published on November 30, 2020
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