Bailout dilemma

Special credit window for NBFCs isn't a good idea

Dewan Housing Finance Ltd’s (DHFL’s) decision to freeze premature withdrawal of deposits is the latest in a series of bad news coming from non-banking finance companies (NBFCs). The problems began in September last year when infrastructure finance company IL&FS defaulted on payments to banks and term deposits and failed to meet the commercial paper redemption obligations. It caused panic in the markets as it impacted banks, mutual funds and investors. A spate of rating downgrades over the past month has also stoked fears of a liquidity crisis, with a cascading effect on the broader markets, leading to the demand that