“The RBI will engage with the new management, if necessary, on assistance in its efforts going forward,” Patel said while announcing the latest monetary policy review here. On Monday, the Central government, acting on a National Company Law Tribunal’s Mumbai bench order, superseded the management of IL&FS by appointing a six-member board led by banker Uday Kotak to restore its financial solvency and prevent further mismanagement in order to protect public interest.
“The well-structured institutional measures taken by the central government in the IL&FS case have been timely and appropriate. These have helped to stabilise the situation,” Patel added.
On Thursday, the new board met for the first time to assess the company’s financial situation and deliberate on viable solutions to restore solvency.
Earlier on Thursday, Finance Minister Arun Jaitley told reporters in New Delhi that there had been “significant impact” on the capital market on account of the contagion effect of the IL&FS problem which had prompted the government to replace the board.
“The government is determined to make sure that since this is an internal factor to India, this should be contained quickly so that no adverse impact is left,” Jaitley said. The firm has around Rs 91,000 crore in long-term debt. As per some industry estimates, the company has an urgent liquidity requirement of around Rs 5,000 crore. Lately, the credit crunch has led a few of the company’s subsidiaries to default in servicing some of the inter-corporate deposits.