Infrastructure Leasing & Financial Services (IL&FS) has so far not sought any fresh funding from State Bank of India (SBI), the bank’s Chairman Rajnish Kumar said.
“Today, there is no concrete proposal. When I receive a concrete proposal, then we will decide,” Kumar said.
SBI, which holds 6.42 percent stake in IL&FS, will take a decision on whether to support the debt-strapped infrastructure lender after discussions with its board.
“SBI board will take a decision based in the larger interest, as I said, of the industry and as well as protect SBI's own shareholders' interest,” Kumar said speaking on the sidelines of an SBI Card event.
SBI’s role as a leader in the industry is to help in stabilising the financial markets
On September 25, Life Insurance Corporation of India (LIC), which is IL&FS' biggest shareholder with a 25.34 percent stake, said it is making all efforts to resolve the cash crunch at IL&FS and did not rule out increasing stake in the company.
“Individually, what we will do, what we will not do is something that has to be examined by SBI and its board,” said Kumar.
The RBI has initiated a special audit of IL&FS after it defaulted on its Rs 450 crore inter-corporate deposits (ICDs) raised from state-owned Small Industries Development Bank of India (SIDBI).
On September 23, Kumar had also stepped in to reassure investors, saying there was no concern related to liquidity at mortgage lenders.
A day before, both the equity and debt markets crashed with the stock prices of home financiers such as Dewan Housing Finance Ltd (DHFL) and Indiabulls Housing Finance tumbling. This fall was attributed to fears of liquidity tightness and potential systemic risk arising from exposure to IL&FS.
Shares of the home financiers have recouped some of their losses after both Indiabulls and DHFL denied they had defaulted on any payments and have sufficient liquidity.
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