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    Reserve Bank of India issues directive to IL&FS Financial to cut loans to group companies, says report

    Reserve Bank of India issues directive to IL&FS Financial to cut loans to group companies, says report

    Reserve Bank of India issues directive to IL&FS Financial to cut loans to group companies, says report
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    By CNBC-TV18  IST (Published)

    The Reserve Bank of India (RBI) has asked IL&FS Financial Services, a non-banking finance company (NBFC), to reduce debt exposure in all its parent group entities by March 2019, reported Business Standard.
    The directive comes in accordance with the norm of group debt exposure for NBFCs, the report said.
    IL&FS Financial Services, a wholly owned subsidiary of IL&FS, was asked to bring its exposure down after inspection showed the capital adequacy ratio and the exposure limits to the group were violated in March, added the report.
    IL&FS, an infrastructure and finance conglomerate, is currently facing liquidity issues, which made the central bank to issue the directive, the daily said. As of March 31 this year, the NBFC's exposure to the top group companies was around 26 percent of total credit exposure and 208 percent of its tangible net worth, it said.
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