IL&FS Securities Services clears LIC Mutual Fund's dues of Rs 3 bn

LIC Mutual Fund said Friday that IL&FS Securities Services, an arm of the crippled infra lender, has cleared its dues worth Rs 3 billion.   

Beginning August 27, the diversified IL&FS group, which is facing a cash crunch, has been defaulting on payments, with it telling regulators on Thursday that it had defaulted on seven payments.  

"We would like to confirm that we have received all our interest payments and/or maturity proceeds from IL&FS group entity, with the final payment of Rs 300 crore (Rs 3 billion) being paid Friday," LIC MF said in a statement.  
 

The developments at the group, which owes more than Rs 910 billion to lenders, have led to a market plunge. The market indices closed Friday with its worst monthly losses since February 2016.  
 

Both these incidents along with advance tax outflows, rupee depreciation, GST related outflows created liquidity deficit in the market to the tune of Rs 1.5 trillion, following which RBI Thursday relaxed liquidity coverage ratio of banks to 15 per cent of their net demand and time liabilities, infusing Rs 2 trillion into the system.