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IL&FS Financial Services defaults on Rs 4.4-billion loan and deposits

The company has also failed to make payments for five bank loans

Bs_logoIL&FS
IL&FS
Dev Chatterjee
Last Updated : Sep 28 2018 | 2:54 AM IST
IL&FS Financial Services, a subsidiary of IL&FS, said it defaulted on Rs524.3 million of short-term deposit due September 27 and Rs1.04 billion of term deposit due on September 25. The company has also failed to make payments for five bank loans which was due between September 12-26 amounting to Rs2.85 billion. 

The Reserve Bank of India (RBI) has asked IL&FS Financial Services to reduce debt exposure in all the IL&FS group entities by March 2019 in conformity with the RBI’s regulations on non-banking financial services on group debt exposure. IFIN’s exposure to group entities is close to 26 per cent of its total credit exposure. 


The RBI’s inspection of the IL&FS Financial Services Limited for fiscal 2018 revealed that the NBFC’s exposure to IL&FS group entities have increased over last few years and it also breached the regulator’s norms on capital adequacy ratio and group exposure limits as on March 2018. The RBI then asked the company to bring its exposure down within a year and has given it time till February next year. It has also banned IFIN to tap the commercial paper market till February next year after it defaulted to its commercial paper. 


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