RBI begins special audit of IL&FS after delay in repayment of inter-corporate deposits

RBI

Reserve Bank of India (RBI) has started a special audit on Infrastructure Leasing & Financial Services (IL&FS), according to a BloombergQuint report.

The development comes after the firm defaulted on repaying around Rs 250 crore worth of inter-corporate deposits to Small Industries Development Bank of India (SIDBI), the report said.

The defaults forced SIDBI to seek intervention from the central bank, following which RBI initiated a special audit against the firm. As a core investment company, IL&FS falls under the regulatory purview of the central bank.

Moneycontrol could not independently verify the report.

The report adds that the infrastructure development and finance company defaulted on the first tranche of repayment worth Rs 100 crore on August 27. After this, it has defaulted on more such tranches.

An additional Rs 100 crore in repayments is due as of September 10, the report stated.

SIDBI has inter corporate deposits worth Rs 500 crore with IL&FS and has an additional deposit of Rs 500 crore with its non-banking finance company arm IL&FS Financial Services.

An inter-corporate deposit is an unsecured borrowing between corporates.

The report further noted that the company is working on a resolution plan. It is expected to inform SIDBI as to how it intends to repay the amount.

The resolution plan reportedly revolves around a Rs 3,000-crore loan that the company is hoping to secure from Life Insurance Company of India (LIC) and State Bank of India (SBI).