DHFL curbs premature withdrawals

New Delhi: Cash-starved Dewan Housing Finance Corporation Ltd (DHFL) has decided to restrict premature withdrawal of deposits and stop accepting fresh deposits as part of reorganising its "liability management" efforts, sources said.

"In view of the recent revision in the credit rating of our fixed deposit programme, acceptance of all fresh deposits, as well as renewals, has been put on hold with immediate effect. "Further, to help us reorganise our liability management, the premature withdrawal of deposits has also been put on hold. This is completely under NHB regulation," one of the sources said.

National Housing Bank (NHB) norms do not allow companies to raise deposits if they do not have an investment grade rating. According to the sources, the company will continue to honour its all premature deposit withdrawal requests in cases such as medical or financial emergency, provided the customers produce valid documents.

"Over the last few weeks there have been several unwarranted speculation in the market about the creditworthiness of DHFL and the company stands committed to honour all its liability payments," one of the sources said.

The company has cleared liabilities of nearly Rs 30,000 crore since September 2018, the sources added. On May 10, DHFL clarified on unwarranted speculation in the market about continuous weakening of the company's credit profile.

"We would like to place on record that the slowdown in business activity in the industry has not had any adverse impact on DHFL's debt repayment ability or loan servicing and collections of the company," it had said. On Tuesday, the RBI decided to have a specialised cadre for supervision and regulation of NBFCs and other financial institutions.