4 min read.Updated: 02 Oct 2019, 09:45 PM ISTG.N. Bajpai
The fall of IL&FS and DHFL had to do with a low-lying systemic risk that could in theory have been tackled
The non-banking financial companies (NBFC) crisis is being held up as one of the culprits of the current slowdown. There is a near consensus that this crisis was triggered by the collapse of Infrastructure Leasing and Financial Services Ltd (IL&FS) and the unfolding of the problems of Dewan Housing Finance Corporation Ltd (DHFL). However, should their failure have led to such a crisis in the sector and impacted the economy as a whole? While both IL&FS and DHFL were large financial institutions, their collapse did not lead to the crumbling of too many other balance sheets. At most, some tremors were experienced.
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