DHFL resolution:SBI says lenders awaiting HC verdict on Nov 11 Mumbai, Nov 6 (PTI) State Bank chairm

DHFL resolution:SBI says lenders awaiting HC verdict on Nov 11 Mumbai, Nov 6 (PTI) State Bank chairman Rajnish Kumaron Wednesday said the lenders will finalise the resolutionplan for the troubled mortgage lender DHFL after the November11 hearing at the Bombay High Court.

Edelweiss AMC, Kotak Mahindra AMC, Axis AssetManagement and Reliance AMC had moved the Bombay High Courtseeking a direction to DHFL to disclose all its assets andliabilities and also to temporarily prevent it from makingpayments/disbursements to secured and unsecured creditors.

'We have to wait what happens on November 11. Then acall will be taken,' Kumar told reporters on the sidelines ofthe India mortgage conclave.

Under the draft resolution plan, the lenders wouldpick up 51 percent stake in the third largest mortgage lenderby converting a part of their debt into equity.

The beleaguered home financier owes Rs 83,873 crore asof July 6 to banks, the National Housing Board, mutual fundsand bondholders. Its secured debt is Rs 74,054 crore while theunsecured debt stood at Rs 9,818 crore.

Kumar said for SBI, the DHFL account is stressed butnot an NPA in the September quarter.

On the High Court restraining DHFL from making anyfurther payments to unsecured creditors, he said it would havea 'very negative impact on the securitisation market as thisis against the contracts.' On resuming lending to the fund-starved NBFC sector,Kumar said SBI is not averse to lending to those NBFCs thathave good rating and have lent prudently to its customers.

According to him, a housing finance company shouldfocus on housing finance only. 'If you are a housing financecompany, be a housing finance company. If you are developerfinance then be a developer finance company,' he said.

It can be noted that the main cause for the liquiditycrisis at NBFCs is due to their large exposure to long-termproject finance, which is funded with short-term borrowing.