Letter to BS: NBFCs feel the pinch as mutual fund houses curb risks

This refers to “NBFCs feel the pinch as mutual fund houses curb risks amid tight liquidity” (February 22). A number of companies have pledged a large percentage of promoter equity as collateral for getting loans from mutual funds (MFs). Some of these companies despite having defaulted in making repayments have signed agreements with lenders not to sell the pledged shares. By signing such agreements, MFs are foregoing their option of recouping a part of the value/full value of the loans which have remained unpaid. To prop up the promoters of defaulting companies, these MFs are doing a disservice to their