DHFL Crisis Spreads: Will Not Allow Premature Withdrawals; Stops Accepting Deposits
In a move that has set off an alarm among investors and regulators, Dewan Housing Finance Ltd (DHFL) said it would neither accept new deposits nor allow premature withdrawals after its debt instruments were downgraded. 
 
“In view of the recent revision in the credit rating of our fixed deposit programme, acceptance of all fresh deposits, as well as renewals, has been put on hold with immediate effect,” read a DHFL e-mail to its customers.
 
Premature withdrawals would be allowed only in cases of medical or financial emergency, the DHFL communication said. 
 
“The company wants to make things clear to depositors who are not rushing to redeem their deposit units,” said a senior industry executive with direct knowledge of the matter. The decision comes just after rating agency CARE downgraded DHFL’s fixed deposit programme worth Rs20,000 crore.  
 
DHFL has about Rs8,400 crore of loan repayments and securitisation payouts coming up in the next eight weeks. DHFL’s available liquidity in April is pegged at Rs2,775 crore even as the company is seeking to sell more assets. The NBFC also assured its stakeholders that it would honour all upcoming payments and have already repaid Rs30,000 crore since September 2018. 
 
CRISIL Ratings downgraded Rs850 crore worth of DHFL commercial papers due to delays in fund inflows from asset sales and securitisation deals. Apparently, some investors have shown interest in buying stakes in DHFL. DHFL offered deposits to the public for tenors ranging from 12 months to 120 months and with interest rates ranging from 8.2% to 9.25% (for deposits of less than Rs5 crore).
 
"We assure you that we stand committed to honouring all our liability payments, and have demonstrated this by repaying liabilities amounting to approximately Rs30,000 crore since September 2018, without a single day's delay," DHFL stated in the e-mail.
 
DHFL’s shaky finances and its shady deals may lead to a huge upheaval in the financial system for which regulators seem ill-prepared.
Please read our exclusive reports on DHFL…
 
 
 
 
 
Like this story? Get our top stories by email.

User

COMMENTS

Ramesh Poapt

4 weeks ago

TOO BAD, DHFL! hope it will survive...and not go burst..

'Glass Piece in Burger' Complaint Against Burger King Outlet
A complaint by a customer alleging a glass pieces being found in a burger at a Burger King outlet here last week is being investigated, a police official said on Monday.
 
"We have registered a complaint by the customer last Saturday (May 18) against Burger King. We are awaiting medical reports from the hospital before taking further steps," investigating officer inspector Deepak Lagad, of the Deccan Gymkhana Police Station, told IANS.
 
Complainant, Sajit Pathan, 31, an autorickshaw driver, had gone for lunch with his friends at the outlet at the FC Road on last Wednesday. He ordered burgers, fries and soft drinks for all his friends, but when he took a bite of his burger, suddenly choked, complained of pain in his throat and spat out blood.
 
His friends, suspecting something may have stuck in his throat, checked Pathan's burger and allegedly found some broken glass pieces in it.
 
They rushed him to a nearby hospital and then to Sahyadri Hospital and paid Rs15,000 for his immediate treatment, but were advised to return the following day.
 
The next day, they against spent more than double the amount but the doctors assured that the glass pieces would naturally exit his body through excretion.
 
Contacted for a response, a manager at the Burger King outlet, who identified himself as Siddharth, denied any knowledge of the incident, saying that he was on leave at that time.
 
According to Mr Lagad, the victim's condition is now fine and he is moving around normally, but the investigations would continue in the matter.
 
A first information report (FIR), invoking various Sections of the Indian Penal Code, including Section 337 (causing hurt by act endangering life or personal safety of others), based on the victim's complaint and his medical reports have been registered, he said, adding that police have scanned the CCTV footage when the alleged incident took place, but prima facie, there was no evidence of glass pieces in the burger.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
Like this story? Get our top stories by email.

User

Is Your Bank Taking Care of Seniors and People with Disabilities? If Not, It Is Violating RBI Directions
It is a fact that India continues to seriously lag behind in public amenities and facilities for senior citizens and people with disabilities. In fact, we take the absence of special facilities so much for granted that not many people know when there is a special mandate or direction to ensure special services. 
 
For instance, the Reserve Bank of India (RBI) circular of 9th November spells out how these groups should be treated by banks (DBR.No.Leg.BC.96/09.07.005/2017-18).This covers issues that have long been a concern for both target groups.  Here is what the RBI now requires banks to ensure -
 
Dedicated Counters 
 
Banks need to have identifiable dedicated counters or give preference to senior citizens and differently-abled persons, says clause 2(a) of the circular. 
 
Ease of Submitting Life Certificate 
 
In addition to the facility of digital life certificate under the 'Jeevan Praman' scheme, pensioners can submit physical life certificate form at any branch (i.e., even a non-home branch) of the pension-paying bank.  The receiving branch should update it promptly in the core banking solution (CBS) system to avoid any delay in the credit of pension, says clause 2(b). 
 
There are innumerable complaints about seniors being asked to approach their home branch for submitting life certificates even today. This clause makes clear that since all branches under CBS are connected, there is no reason why a pensioner cannot submit a life certicate to a non-home branch. Banks are not only expected to accept the life certificate but should also update it on the CBS to ensure there is no interruption in receiving pension.  
 
Cheque Book Facility (Section 2c)
 
Banks are expected to provide cheque books with 25 leaves free of charge every year for savings account-holders on submission of the requisition slip.
 
Banks shall not insist on physical presence of any customer, including senior citizens and differently-abled persons for getting a cheque book.
 
Such facilities should also be provided to the basic savings bank deposit accounts (BSBDA) customers in these categories. Or rather, they cannot be denied these facilities on the grounds that they have an BSBDA account. 
 
Automatic Conversion of Status of the Account (clause 2d):
 
All fully KYC compliant accounts should automatically be converted into ‘senior citizen accounts’ on the basis of date of birth mentioned in the KYC documents. The customer does not need to inform the bank on change of status. Clearly, CBS software has to take care of this. 
 
Facilities to Visually-impaired Customers (clause 2-e)
 
RBI already provides certain facilities for people with disabilities as well as sick, old and incapacitated persons through a circular issued  on 1 July 2015 (Master Circular DBR. No. Leg.BC.21 / 09.07.006 /2015-16). This provides that such persons can operate their accounts by identification through thumb/toe impression with two independent witnesses and authorising a person who would withdraw the amount on behalf of such customers. This facility is now being extended to visually-impaired customers.
 
So a visually-impaired person can provide a thumb/toe impression or authorise someone to withdraw money on her behalf in the presence of two independent witnesses.
 
Ease of Form 15 G / H  (clause 2h):
 
In April every year senior citizens are required to fill up form 15 H, others need to fill form 15G, to ensure that those outside the taxable limits do not have tax deducted at source on their term deposits with the bank, so as not to recover tax deducted at source (TDS) from interest on deposits. Since this is a declaration about annual income, it should be submitted only by eligible persons, i.e., account holders whose total annual income is below the tax threshold limit.
 
The RBI circular says that senior citizens and differently abled persons should be provided these forms so that they can be submitted within the stipulated time. 
 
Door Step Banking (clause 2g)
 
RBI has asked banks to go the extra mile to help senior citizens above 70 and people with disabilities, as well as sick, ailing and infirm persons (those having a medically certified chronic illness or disability) by making a concerted effort to provide basic banking facilities, such as pick-up and delivery of cash; pick up of instruments against receipt, delivery of demand drafts, submission of KYC documents and Life certificate at their residence. 
 
The full circular is available on the website of RBI and interested bank customers should read the entire circular carefully. Here is the link to the circular
 
(Mr Abhay Datar is a retired banker and also a well-known consumer activist. He volunteers his time every Thursday to guide members of Moneylife Foundation on consumer issues, banking and insurance matters).
Like this story? Get our top stories by email.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

online financial advisory
Pathbreakers
Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
online financia advisory
The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Online Magazine
Fiercely independent and pro-consumer information on personal finance
financial magazines online
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
financial magazines in india
MAS: Complete Online Financial Advisory
(Includes Moneylife Online Magazine)