The public sector Banks have bought out nearly Rs 12,000 crore in loans from stressed non-bank lender Dewan Housing Finance Ltd. since September 2018.
The loan purchases, done through the bilateral ‘direct assignment’ route, helped DHFL generate much-needed liquidity to repay dues as it struggled to raise fresh financing from the debt markets following the collapse of Infrastructure Leasing and Financial Services Ltd. in September.
The largest purchases have been by State Bank of India, which has bought approximately Rs 4,000 crore in housing loans since September, and Bank of Baroda, which concluded a Rs 3,000-crore loan purchase in June.
Bank of India and Oriental Bank of Commerce has bought Rs 1,000 crore and Rs 1,440 crore worth retail loans respectively. The total quantum of loans purchased by the government-owned banks is close to Rs 12,000 crore.
According to a company statement on June 11, DHFL has paid back liabilities of over Rs 36,000 crore without availing any fresh funding since September. Most of this liquidity to repay dues has been generated through securitization.
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