INSUBCONTINENT EXCLUSIVE:
to participate in the rescue of Dewan Housing Finance Corporation Ltd, according to two sources involved in talks between bankers and
officials over how to restructure the shadow bank's near Rs 1 lakh crore debt.A consortium - led by Union Bank and State Bank of India -
was set up to restructure DHFL's debt a month after it defaulted in June.But having struggled to come up with a rescue plan, the banks
last week turned to the government for help, the two sources directly involved in the talks told Reuters
But as DHFL is a private company with limited links to government, New Delhi is likely to stay clear, said the sources, who requested
anonymity as the discussions were private."There is no question of the government issuing directions to the banks (to support DHFL)," one
senior government official with direct knowledge of the issue told Reuters.Litigation and investigations into alleged wrongdoing at the
shadow bank could potentially hamper any plan the banks come up with to salvage DHFL.DHFL's creditors include mutual funds, pension funds,
insurance firms and a wide array of retail investors, and its potential collapse could impact the country' already ailing banking sector and
further weaken economic growth."If the government of India steps in, it will be a welcome step but our talks suggest that it is unlikely to
happen," said the second source, from one of the lead banks in the consortium.A government spokesman declined to comment
DHFL did not respond to a request for comment
Neither, Union Bank or SBI were immediately available for a comment.DHFL is currently classified as stressed account but will slip into
becoming a Non-Performing Assets (NPA) by December 31 unless a resolution is found.Get Breaking news, live coverage, and Latest News from
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