RBI assures all help to troubled NBFCs; SBI monitoring exposure to sector
Mumbai: The Reserve Bank of India on Thursday said it is closely monitoring the developments in the NBFC sector and will not hesitate to take measures to ensure financial stability.
This comes in the backdrop of two domestic rating agencies downgrading commercial papers of debt-laden DHFL.
The country's largest lender SBI too said it has been closely monitoring its exposure to the NBFC sector for the past 10 months and taking action as required.
RBI Governor Shaktikanta Das, during his post policy interaction with the media, said the apex bank is closely monitoring the troubles brewing in the NBFC sector due to the liquidity crisis.
Stating that the RBI is committed to ensuring a robust and well-functioning NBFC sector, Das said, "The central bank will not hesitate to take whatever steps are required to ensure that the financial stability is not adversely impacted in any manner by any development."
The comments came following a bond repayment default by Dewan Housing Finance (DHFL), the third- largest pure-play mortgage player, and the resultant rating downgrades of its Rs 850 crore commercial papers to default grade by Crisil and Icra.
Later in a statement, SBI said the overall quality of the NBFC asset portfolio on its books continues to be good.
"Challenges faced by accounts like DHFL have already been factored in when we have given our estimate for the stress that the Bank would have to deal with in FY 19-20 and included in our estimates for slippage and loan loss provisioning for the current financial year," it said.
Refuting the credit rationale, DHFL said the action by the rating agencies is extremely surprising as the company has been making and continues to make substantial efforts in ensuring no defaults on any bonds and repayment of its financial obligations.
"These actions are unwarranted and the company is seeking clarification on the rationale that predicts DHFL's inability to service pay outs on the due dates. Such speculative rating rationale is not adequate," the housing finance firm said in a statement.
Since September 2018, DHFL has repaid close to Rs 40,000 crore of financial obligations, it said.
To ensure adequate liquidity to meet the repayments, DHFL also sold its strategic retail assets including Aadhar, Avanse and DHFL Pramerica Asset Managers, it said, adding that the company is committed towards ensuring repayment of all its obligations.
Following the rating action, shares of DHFL plummeted nearly 16 per cent. The scrip tanked 15.86 per cent to close at Rs 93.90 on the BSE. During the day, it dived 18 per cent to Rs 91.50 -- its 52-week low.
Crisil in a note Wednesday said the downgrade to 'default' or 'D' reflects delays in debt servicing by DHFL on some of its non-convertible debentures (NCDs) because of inadequate liquidity. The payments were due on June 4, 2019.
