NBFCs are facing liquidity concerns but no crisis: govt
Amidst authorities working on ways to tackle the IL&FS crisis, corporate affairs secretary Injeti Srinivas on Monday said non-banking financial companies (NBFCs), 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group companies, has sparked off concerns over liquidity in the system, while the corporate affairs ministry last month superseded the holding company’s board as part of larger efforts to contain the situation.
Responding to queries about liquidity situation, Injeti Srinivas said that basically in the nonbanking financial companies 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.
“This situation should ease but at the same time... the way business is conducted by this sector, they will have to deeply introspect and adopt the model which is sustainable, which takes into account sources of funds, deploy them... so you minimise this mismatch,” he said.
He was responding to a query on whether the ministry in a report has flagged concerns about liquidity crunch faced by three leading housing finance companies—DHFL, Indiabulls Housing Finance and PNB Housing Finance.
NEW DELHI: