IL&FS crisis: This subsidiary ran business without capital for 3 years

IL&FS Financial Services (IFIN), the lending arm of IL&FS, seems to have run operations without a capital base for three financial years — FY16, FY17, and FY18, according to preliminary assessment by the new board of the beleaguered company.

IFIN had outstanding loans and investments to companies in the IL&FS Group of Rs 57.28 billion (FY16), Rs 51.27 billion (FY17), and Rs 54.9 billion (FY18). Prima facie, these appear to be significantly in excess of permissible norms for all the years.

“If this is applied for calculation of capital adequacy, IFIN would have significant negative capital adequacy in each of