IL&FS crisis: Normalcy to return to system in couple of weeks, says SBI Chief

In wake of the IL&FS crisis, efforts are underway by the Indian government, RBI as well as SBI to try and stabilise the system very quickly and things are likely to return to normal in a couple of weeks, Rajnish Kumar said. Kumar said that the Infrastructure Leasing and Financial Services (IL&FS) was a unique institution operating in the infrastructure financing and construction space. It is an engineering, procurement and construction (EPC) contractor, holding assets as well as its finances – it was a 3-in-1, Kumar said, adding that whether it is banks or non-banking financial companies (NBFCs), if they are in infrastructure financing, they have faced trouble in India. Infrastructure, particularly the BOT (build–operate–transfer) model, has caused a lot of problem even to the banks. We ourselves have suffered in the financing of infrastructure, Kumar said. Because of the IL&FS default, there is pressure on mutual funds. The corporates who were providing liquid funds to mutual funds have become very cautious. In turn, the mutual funds have become cautious about their investments, he said. I believe it is a matter of time – a couple of weeks when things return to normal, he said.

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