DHFL seeks intervention from SBI, Union Bank to repay depositors

In letters to the State Bank of India and Union Bank of India, DHFL has sought the lenders’ help to resume repayments to depositors, a process now on hold after a Bombay High Court order. The home financier has cited its adequate cash balance to r...

MUMBAI: Dewan Housing Finance Corporation (DHFL) has urged its two top lenders to help lift a moratorium on repayments so that the stressed mortgage lender could begin repaying its depositors.

In letters to the State Bank of India (SBI) and Union Bank of India (UBI), DHFL has sought the lenders’ help to resume repayments to depositors, a process now on hold after a Bombay High Court order. The home financier has cited its adequate cash balance to repay its depositors.

On Tuesday, DHFL had written letters to SBI’s chairman Rajnish Kumar and Rajkiran Rai G, MD and CEO of UBI, urging them to intervene into the matter to “ensure that all the deposit payments continue to be paid as per the scheduled dates.”


ET has seen copies of both the letters.

“You are also aware that the company is approaching the court to request vacating the stay and to seek suitable order to allow it to service its depositors and that the debt resolution plan has the principle of all deposit holders getting back their investment,” DHFL chairman Kapil Wadhawan said in the letters. “The company’s board has voiced its concern at common depositors not getting access to their deposits.”

On Sunday, DHFL told exchanges that it has repaid Rs 44,000 crore toward its debt obligations in the past 13 months.
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"The High Court of Bombay in the case filed by Reliance Nippon Life Insurance passed an order on September 30 and October 10, restraining the company from making payments to any of its secured/unsecured creditors, including the payments to any fixed deposit holders," DHFL had said in the same filing.

Currently, apart from the liquidity crisis, the company is also facing an investigation by government agencies. The Ministry of Corporate Affairs has ordered the Special Fraud Investigation Office (SFIO) to probe instances of alleged financial irregularities at DHFL.

Also, Catalyst Trusteeship, a trustee to NCD holders, has approached the Pune bench of the Debt Recovery Tribunal (DRT) to recover their dues from the mortgage lender.

Bondholders have Rs 41,000 crore exposure to DHFL and banks have Rs 27,527 crore.
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