NBFCs facing liquidity issues but no ‘crisis’, says Corporate Affairs Secretary

Amidst authorities working on ways to tackle the IL&FS crisis, Corporate Affairs Secretary Injeti Srinivas Monday said non-banking financial companies, particularly housing finance firms, are facing liquidity issues but there is “no crisis” He also emphasised that there is a need to introspect the business models followed in the NBFC sector and adopt the model that is sustainable. The IL&FS crisis, triggered by debt defaults by some group companies, has sparked off concerns over liquidity in the system, while the Corporate Affairs Ministry last month superseded the holding company’s board as part of larger efforts to contain the situation. Srinivas said that basically in the NBFC segment, the issue is more pronounced with respect to housing finance companies that are facing liquidity problems. “I won’t get into individual names. It is segmental problem these are big entities part of that segment. At the macro level some measures have been taken. About the Serious Fraud Investigation Office (SFIO) probe into the IL&FS case, Srinivas said there is progress on that front. “There are more than 300 companies and there are many issues. SFIO is investigating. It is taking deposition from key personnel,” he added.

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