Main content

Home

Menu

Loading wiki pages...

View
Wiki Version:
India’s leading infrastructure development and financial services company - Infrastructure Leasing & Financial Services (IL&FS) and its subsidiary companies failed to repay multiple debt obligations and thereby started to default in mid-2018. This caused panic in the Indian debt market creating a cascading effect on other financial services, particularly in the NBFC sector. Government of India and the monetary regulator – the Reserve Bank of India (RBI) quickly stepped in to rescue the company. Rejecting a blanket bailout solution, but considering the “too big to fail” size of the company, they took timely action barely avoiding a total financial collapse. This meant that India avoided a ‘Lehman Brothers moment’. This paper explores reasons leading to the crisis, steps taken by Government and regulators to rescue, consequences of the default and lessons learnt from the experience. While Indian experience in large-scale financial defaults is limited, this paper takes the opportunity to understand the problem and post-crisis handling. Learnings from this study can help strengthen regulatory provisions so that these do not recur, minimize the trouble from spreading to other financial segments of the economy and possibly protect the vulnerable company stakeholders such as creditors, investors etc.
OSF does not support the use of Internet Explorer. For optimal performance, please switch to another browser.
Accept
This website relies on cookies to help provide a better user experience. By clicking Accept or continuing to use the site, you agree. For more information, see our Privacy Policy and information on cookie use.
Accept
×

Start managing your projects on the OSF today.

Free and easy to use, the Open Science Framework supports the entire research lifecycle: planning, execution, reporting, archiving, and discovery.