An office of the DHFL.IANS

Depositors of the Dewan Housing Finance Corp Ltd (DHFL), whose claims have been on the backburner amid massive debt to lenders, may find some respite, reports suggest. Reserve Bank of India (RBI)-appointed administrator R Subramaniakumar has asked all creditors, including the depositors, to raise their claims by December 17.

The insolvency resolution professionals listed are Charu Sandeep Desai, Deepak Kumar and Pravin Navandar

The deposit-taking housing finance company went under administration after its top officials were charged with money laundering and other irregularities in an investigation triggered by the company's bond repayment default. Along with other non-banking finance companies (NBFC), the DHFL's meltdown threw the entire banking system into a crisis under a pile of non-performing assets (NPA).

Claims with proof

The administrator had directed the depositors to indicate their choice of an authorised representative from the three insolvency professionals named by the RBI to act as their authorised representative. The insolvency resolution professionals listed are Charu Sandeep Desai, Deepak Kumar and Pravin Navandar.

The authorised representative will raise the depositors' voice at the meetings of the committee of creditors (CoC). The representative will also facilitate voting by depositors at these meetings, a report on the Livemint website said. The insolvency resolution process was expected to be completed either within 180 days from the start of the process, or by May 31, 2020, the report cites Subramaniakumar as saying.

Reserve Bank of India
The Reserve Bank of India has appointed R Subramaniakumar as the administrator for DHFL.IANS

"Notice is hereby given that the National Company Law Tribunal has ordered the commencement of a corporate insolvency resolution process of DHFL on 3 December 2019. The creditors of DHFL, are hereby called upon to submit their claims with proof on or before 17 December 2019 to the administrator," the administrator's statement said. The DHFL website also carries a detailed guideline for deposit holders including the format for a depositor's claim form. Each depositor needs to file only one form even if there are multiple deposits.

Liquidity squeeze

The company held public deposits of Rs 6,188 crore as of July 6, falling from Rs 10,166 crore at the end of the 2017-18 financial year. On May 21, the DHFL stopped accepting public deposits and renewals of existing deposits, the report said. It also stopped premature withdrawals of existing deposits to "help reorganise its liability management".

The NBFC crisis is believed to have been triggered by the liquidity squeeze following the demonetisation by Prime Minister Narendra Modi's government in its previous stint. The collapse of IL&FS led to a domino effect bringing down several lenders including the DHFL. Finance Minister Nirmala Sitharaman and her predecessor Arun Jaitley initiated several measures to steady the ship but have not fully succeeded as more institutions teeter on the brink.