RBI dismissed IL&FS suggestion for more funds for infra holding companies

Facing liquidity issues, ITNL decided to merge companies to show a bigger balance sheet

The Reserve Bank of India (RBI) rejected Infrastructure Leasing and Financial Services’ (IL&FS’s) suggestion that commercial banks should extend financing to holding companies in the infrastructure sector, shows a draft report by Grant Thornton (GT).
 
The report contains the screenshot of an email of March 2016, in which former chairman of IL&FS, Ravi Parthasarathy, informs key management persons including former vice-chairman Hari Shankaran that he had met RBI Deputy Governor R Gandhi and told him about the genesis of such holding companies and advantages of the platform. However, Gandhi told him that the view in the central bank was