FD HOLDERS SEEK STAY ON DHFL’S LENDING PLANS

MUMBAI: Fixed deposit (FD) holders of Dewan Housing Finance Corp. Ltd (DHFL) have approached the Supreme Court seeking a stay on the company’s plans to resume lending, according to a copy of the petition seen by Mint.

“Restrain the respondent No. 1 (DHFL) from commencing, resuming or continuing its lending operations till matured deposits are duly paid, and maturing deposits are continued to be paid, and pre-mature re-payments are made to deposit holders in case of death/critical illness of deposit holder,” the petition said.

According to the petition, FD holders are seeking a stay till their deposits are repaid. They appealed to the top court saying it is contradictory and contrary to law that a financial institution which is unable to repay its fixed depositors upon maturity, proposes to lend ₹500 crore a month.

Depositors, in their petition, quoted a letter from National Housing Bank to DHFL on August 14 last year mandating that before any resolution for DHFL, “the repayment of public deposits upon maturity and/or in the case of death/critical illness must not be stopped/delayed”.

Mint reported on January 5 that the committee of creditors to DHFL has approved a plan under which the mortgage lender will resume advancing home loans beginning with ₹500 crore a month to arrest the decline in its loan book. The company’s loan book was shrinking by 1.6-2% on a monthly basis and creditors expect it may shrink 10% over the next six months. The company has not disbursed loans in more than six months due to a liquidity crunch that also led to a series of defaults in repaying debt.

An email sent to R Subramaniakumar, the Rbi-appointed administrator, seeking comments remained unanswered till press time.