Troubled Dewan Housing Finance Corporation Limited (DHFL), you may be able to get it, though the company, which is currently under insolvency resolution process with the NCLT can now resume offering home loans.
According to a Livemint report, the Committee of Creditors (CoC) of DHFL has agreed in principle to allow the company to resume lending subject to a maximum of Rs 500 crore a month.
It has been explained that having stopped lending operations, the core activity of DHFL, the company’s net worth was getting eroded and the lenders to DHFL realized that if one of the solutions at the NCLT proceedings is to find a buyer to take over the housing finance company, it won’t fetch a higher value. This is the primary reason for this decision to allow Dewan Housing to start disbursement of fresh loans.
It must be understood that the borrowers of DHFL have been remitting their repayments regularly, and around Rs 1,700 crore to Rs 1,800 crore is being collected. But the funds are lying idle since the promoters are no longer in control of the company and the RBI-appointed administrator, R. Subramaniakumar is handling the day-to-day affairs at DHFL. With the latest decision, these funds will be accessed, and lending resumed by the company. There won’t be any infusion of funds into the company from external sources however.
Finding genuine borrowers in the fresh attempt at lending is again going to be a challenge. A process adviser, Ernst & Young (EY), has been appointed to review the credit and business risks before such lending and to take care of the legal services, AZB & partners have been appointed.
In yet another move at cutting down on the running expenses at DHFL, the administrator has decided to shut down two overseas offices, in Dubai and in London.
The lenders to DHFL are also keen that subject to the insolvency resolution proceedings at the NCLT, the funds being recovered by the company may be used to repay their dues at least partially. This is particularly in the case of those lenders who had bought assets under securitization deals.
Here too, the administrator, Subramaniakumar has stepped in. He has asked the regulator to relax the terms in a way that the lenders to DHFL who had invested in securitization deals may be paid back the dues proportionate to the recoveries being made by DHFL, on a regular basis. The individual lenders have been advised by the administrator to approach RBI on their own as well.