With RBI at the helm, lenders expect faster DHFL resolution; regulator-driven IBC process will accelerate case, say analysts

  • Defending the lenders, the banker said, they cannot be blamed for the troubles with the third-largest pureplay mortgage player, which became the first NCLT case from the NBFC/HFC segment

  • The banker said lenders will help the RBI in the process as they know the asset very well and will act as the first point of call for the central bank

  • Under the IBC, a dud asset case has to be resolved within 180 days, which can be extended to 330 days after the latest amendments

Mumbai: With the Reserve Bank of India spearheading the bankruptcy process of the troubled mortgage lender DHFL, the system can expect a faster resolution, a top banker has said.

The banker also defended the lenders, saying they cannot be blamed for the troubles with the third-largest pureplay mortgage player, which became the first NCLT case from the NBFC/HFC segment, and asserted that left to themselves, the banks would have easily resolved the case.

The comments come a day after the RBI invoked the provisions of the recently notified provisions in the IBC and superseded the DHFL board and appointed an administrator and said the company would go to NCLT shortly.

 With RBI at the helm, lenders expect faster DHFL resolution; regulator-driven IBC process will accelerate case, say analysts

Representational image. Reuters.

"Those timelines which are there in regular IBC may not be needed in this case because it is a regulatory-driven process," the banker told PTI, wishing not be quoted. "Obviously it is different than any other IBC process. A regulatory-driven IBC process will accelerate the entire process," he added.

It can be noted that under the IBC, a dud asset case has to be resolved within 180 days, which can be extended to 330 days after the latest amendments. The banker said lenders will help the RBI in the process as they know the asset very well and will act as the first point of call for the central bank.

He said Section 227 of the IBC has been a boon for the lenders, which will help resolve toxic cases involving NBFCs like DHFL, and hoped that there should not be very many of such cases.

Corporate lawyer Behram Vakil, who was involved in the framing of the IBC, also said the amendments will give more teeth to the law and that DHFL resolution is "uncharted territory" and expressed confidence that the RBI will move fast on DHFL resolution.

Meanwhile, the banker also defended the lenders' role in the DHFL case so far, hinting that the presence of mutual funds who had their own views on various aspects, prevented the asset from getting resolved till now.

He said DHFL's biggest asset is the loans that it has made, and made it clear that like any other NBFC, it would have done securitisation deals.

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Updated Date: Nov 22, 2019 08:06:52 IST