Mumbai: Stressed mortgage lender Dewan Housing Finance Corp. Ltd (DHFL) has turned down a depositor seeking premature withdrawal saying it has been advised against doing so by its lenders.
According to the copy of the response, dated 14 October, received by Ishan Chakrabarty, whose mother, a 75-year-old cancer patient, is the depositor, DHFL said it has also informed the National Housing Bank (NHB) about this. Kumkum Chakraborty, the cancer patient, submitted two applications, one in July and the other in September, seeking premature withdrawal of her ₹14 lakh deposit.
“Consequently, we are not processing requests for premature closure of deposits as advised by the consortium of lenders, until further notice. We have also provided an intimation to the National Housing Bank, in this regard," said the letter, a copy of which has been reviewed by Mint.
State Bank of India has an exposure of about ₹10,000 crore to DHFL, the bank’s chairman Rajnish Kumar had told shareholders at its annual meeting in June. Other lenders to DHFL include Bank of India, Central Bank of India, Andhra Bank, Canara Bank, Punjab National Bank, and Corporation Bank.
As on 6 July, the company had public deposits of ₹6,188 crore, which fell from ₹10,166.72 crore at the end of March 2018. On 21 May, DHFL stopped accepting public deposits and renewing existing deposits. It also stopped premature withdrawals of existing deposits to “help reorganize its liability management".
Meanwhile, the company told stock exchanges on 3 November that the Bombay High Court in the case of Reliance Nippon Life Insurance v/s DHFL passed an order on 30 September, 2019 and 10 October, 2019, restraining it from paying any of its secured or unsecured creditors, including fixed deposit holders.
“The company was making all payments for maturity and interest on all fixed deposits held with the company, on their respective due dates, and there has been no delay in making any payment to any fixed deposit holders until the orders," it added.
Led by Union Bank of India, lenders are examining a draft resolution plan for DHFL. The plan envisages conversion of a part of its debt into equity for lenders, giving them a 51% stake in the company. As on 6 July, the company’s total debt stood at ₹83,873 crore, of which ₹38,342 crore was owed to banks.