Administrator asks Cibil to verify DHFL’s retail loan book

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Published: February 26, 2020 7:29:57 AM

This decision was taken in the light of apprehensions expressed by some prospective resolution applicants (PRAs).

Dewan Housing Finance Corporation, DHFL, Cibil, retail loan data, prospective resolution applicants, committee of creditors, Insolvency and Bankruptcy Code, IBC, Slum Rehabilitation Authority, SRA, Enforcement Directorate, ED, State Bank of India, SBIAscertaining the authenticity of the insolvent financier’s retail book is crucial.

The administrator of Dewan Housing Finance Corporation (DHFL) has approached credit bureau Cibil to authenticate the beleaguered mortgage lender’s retail loan data, sources aware of the development told FE. Cibil has also been tasked with verifying the loan pools securitised and sold by DHFL.

Further, administrator R Subramaniakumar has told creditors that the retail book will also be audited for assessing its “completeness”. This decision was taken in the light of apprehensions expressed by some prospective resolution applicants (PRAs), the administrator is understood to have told the committee of creditors (CoC) at its third meeting on Thursday.

At the meeting, Subramaniakumar also said the eligible resolution applicants will be enabled to carry out management meetings, branch visits and project site visits as per the provisions of the Insolvency and Bankruptcy Code (IBC). “The administrator said conferences shall also be organised to address any clarifications sought by the resolution applicants and it will be done in a time-bound manner, keeping in the mind the overall timelines associated with the insolvency process,” a source said.

Ascertaining the authenticity of the insolvent financier’s retail book is crucial to its successful resolution as that portfolio is believed to be a relatively more valuable and better-performing one than DHFL’s wholesale and Slum Rehabilitation Authority (SRA) portfolios. Questions on the quality of assets in DHFL’s retail book surfaced in January after the Enforcement Directorate (ED) said in court that that till 2015, DHFL had recorded loans worth about Rs 12,773 crore in its books, which were allegedly advanced to about one lakh fictitious retail customers. In actual fact, these loans had actually been given to 79 companies allegedly associated with DHFL’s promoters.

Banks had last year acquired retail asset pools worth about Rs 37,000 crore from DHFL in order to help the troubled mortgage lender shore up liquidity. In the light of the directorate’s deposition, State Bank of India (SBI) had said it would re-examine the pooled retail loans it had bought from DHFL.

SBI chairman Rajnish Kumar had said after the bank’s Q3 results, “We do a thorough due diligence at the time of purchase of loan pools. But, we will have a look again in the light of what the ED (Enforcement Directorate) has said. So that exercise will be carried (out). We will have a relook.”

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