Normalcy to return in few week: Kumar

New York, Oct. 30: 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, SBI chairman Rajnish Kumar said here.

Mr Kumar said that the 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 3in- 1, Mr Kumar said, adding that whether it is banks or non- banking financial companies, 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, Mr Kumar said during an interactive session at an event organised at the Indian Consulate under the aegis of Consul General Sandeep Chakravorty.

The event is organised by the Consulate in partnership with the US- India Strategic Partnership Forum ( USISPF).

Responding to a question on IL& FS and the impact of shadow banking on the Indian economy, Mr Kumar said since it is an NBFC, it has had a contagion effect.

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.

Mr Kumar added that in wake of the IL& FS crisis, the SBI stepped up in a big way.