DHFL default: RBI closely monitoring NBFC sector, housing finance companies; to ensure financial stability

Mumbai: The central bank is closely monitoring the developments in the NBFC sector and housing finance companies (HFCs) and will ensure that financial stability is maintained, governor Shaktikanta Das said on Thursday.

The comments come following the bond defaults by mortgage lender DHFL on 4 June, which led to a slew of rating downgrades of the company. The stock lost more than 20 percent Thursday.

 DHFL default: RBI closely monitoring NBFC sector, housing finance companies; to ensure financial stability

Representational image. Reuters.

"We have been closely monitoring the performance and developments in the NBFC and HFC sectors," Das told reporters during the customary post-RBI policy conference.

Stating that the central bank is committed to have a robust NBFC sector, Das said, "the RBI will not hesitate to take any measure to ensure financial stability in the sector."

After DHFL's bond repayment default, rating agencies CRISIL and ICRA had on Wednesday downgraded rating on its Rs 850-crore commercial paper to 'default' from 'A4'.

The rating revision factors in further deterioration in DHFL's liquidity profile and delays in meeting scheduled debt obligation on 4 June, 2019, ICRA had said in a note.

The company has commercial paper worth Rs 750 crore maturing in June with the first repayment on 7 June.

Updated Date: Jun 06, 2019 13:30:14 IST